What health care ‘free market’?
July 2nd, 2009 by John Grooms in Boomer with an Attitude
As a follow-up to my column this week on health insurance companies, which has triggered an, er, healthy online discussion (along with the usual name-calling), here’s an interesting sidelight to the debate in Congress. Just how out of touch are some politicians when it comes to average Americans’ struggles with insurance companies? Some of them, specifically Sen. Richard Shelby of Alabama and Sen. Olympia Snowe of Maine, say that the one thing they want to avoid is cutting into health insurance companies’ profits.
Snowe is expected to support health care reform in the end, but Shelby is adamant in opposition, saying that Pres. Obama’s plan for a public option would “destroy the marketplace for health care,” to which most Americans would answer, “*What marketplace?” Since when do Americans enjoy anything resembling a competitive marketplace for health care?
A new report from the reform group Health Care for America Now (HCAN), using AMA data, shows that 94 percent of the country’s insurance markets are “highly concentrated,” according to Dept. of Justice standards. Rather than offering much choice for consumers, the report states, the current health insurance system is “a market failure where a small number of large companies use their concentrated power to control premium levels, benefit packages, and provider payments in the markets they dominate.”
Gee, no wonder premiums have nearly doubled in the last six years, while profits for 10 of the largest health insurance companies shot up over 400 percent. That kind of “marketplace” we can, and should be able to choose to, do without.
July 2nd, 2009 at 3:26 pm
Well Mr. Grooms,
insurance companies are forced to insure and cannot discriminate on who they can insure — govt regulation.
insurance companies are in the business to make a profit. They want to minimize risk and maximize profit.
I say we can open up the market for health insurance companies via de-regulation. No state licensing requirements for insurance companies. Combine that with letting insurance companies have the freedom to insure who they want to insure.
Do not force companies to provide benefits.
These are free market ideas. So as you can see, we have not had a free market in healthcare.
July 2nd, 2009 at 7:16 pm
So profits shot of 400%. That is usless information and you know it. What is their profit margin yea goof? If they profited a penny 6 years ago that would mean that they now made 4 cents. Without sufficient information we cannot make an informed decision. With people like Grooms trying to snow job the average person, I can see why so many people screwed up and voted for Obama.
The leaders that are out of touch are the ones that have been voting yes on bills that they have never read and have not idea what is even in it. The leaders that are doing that are the DEMOCRATS of course.
July 3rd, 2009 at 12:28 am
Mr. Fisher,
In my opinion:
Insurance Companies, their lobbyists and attorneys (to name a few), have invested billions over many years to craft a framework of statutes and laws (Federal and State) that allow them to essentially discriminate by defining “groups”. They cry: we need to segregate people into groups in order to abate risk.
Do you think that Insurance Firms are the only type of business that tries to maximize profits and mitigate risk? No, of course not. However, they are one of the few industries with the power and political influence to “impose profits” without real competitive forces at play.
If you are looking for less restraint on free market, wouldn’t it be better to classify a group as the “Group of North Carolina Citizens” or the “Group of US Citizens”, not severed into small groups that insurance firm can exploit? Why should a 1000 employee NC corporation get better insurance premiums than a 25 employee NC firm? I thnk it is because they re more and more smaller firms and entrepreneurs.
Wouldn’t it mitigate risk even further if each firm had to write premiums from a few standard boilerplate contracts? On the other hand, I suppose the ongoing system of ever-changing legalese and planned obsolescence might take a tool on the attorneys business.
It seems to me that simple uniform, even-handed, transparent (without minimal group segregation) is more effective and will drive down prices that the nurtured bureaucracy fostered to by the so-called free marketers.
Regards,
Joe
, ontract, not one that that mitigate risk? Why couldn’t the State Insurance Commission impose a boilerplate benchmark to which all firms must bid premiums by spreading and allow insurance firm to bid on that basis? The riskInsurance companies are privy to special statutes and legal If you really desire free market in the insurance industry, it seems to me that the concepthave had the right to insure whom they want at the
July 3rd, 2009 at 10:41 am
Good arguments Joe but here is some additional information.
“Why should a 1000 employee NC corporation get better insurance premiums than a 25 employee NC firm?”
When I go to Sams do I not get a better deal if I buy 5 boxes of cereal insted of one at the local store? Buying in bulk has advantages.
“that allow them to essentially discriminate by defining “groups”. They cry: we need to segregate people into groups in order to abate risk. ”
Its called keeping it real. Different races have different needs. I know the mantra we are all equal bla bla bla. Under the law we are equal but races do have differences. Hispanics would not want a policy that protected them against sickle cell whould they? Or to be even more obvious would a man want to have an insurance policy that covered abortion or breast enlargement?
July 4th, 2009 at 2:21 am
Frank,
I appreciate your rebuttal. Please note:
I’m a Caucasian male, for what it is worth. I mention because I’m not at all making a racial discrimination claim. I’m using the discrimination as it is defined “to make a choice” and segregation as “to divide and group”. It seems crystal clear to me that the insurance industry’s Modus Operandi is to divide and conquer, not reduce risk. The end result: rising costs while taking a piece of the profits to pad the pockets of lobbyists, lawyers, etc.
Regarding the large corporation versus the small entrepreneur, Sam’s Club doesn’t restrict membership to the little guy. He can join “the club” at the same price as the big player.
July 20th, 2009 at 2:56 pm
You changed my argument. It was Sams vs a regular store not sams vs sams. Larger companies get a bulk rate and it makes sense.
Being a white male does not make your argument stonger or weaker in this situation. Unless you identify the risk factors you cannot price the risk. There is no onther way to price risk unless you just do not price risk at all anymore. People have to be divided into groups like smoker vs nonsmoker. I bet most people think smokers should pay more for the voluntary damage they do to their own health.
The padding or profits you refer to is what is used to pay peoples wages of all employees not just the top brass.