Steven Benen of the Washington Monthly reports on the concentration in the insurance industry:
Zachary Roth has a very good piecetoday pointing to a HCAN report documenting the fact that mostAmericans don't enjoy "anything like a competitive marketplace forhealth care."
The report, released by Health Care for America Now(HCAN), uses data compiled by the American Medical Association to showthat 94 percent of the country's insurance markets are defined as"highly concentrated," according to Justice Department guidelines.Predictably, that's led to skyrocketing costs for patients, and monsterprofits for the big health insurers. Premiums have gone up over thepast six years by more than 87 percent, on average, while profits atten of the largest publicly traded health insurance companies rose 428percent from 2000 to 2007.
Far from healthy market competition, HCAN describes thesituation as "a market failure where a small number of large companiesuse their concentrated power to control premium levels, benefitpackages, and provider payments in the markets they dominate."
So extreme is the level of consolidation, in fact, that one formertop Federal Trade Commission official working with HCAN has sent aletter to the Justice Department's Antitrust Division, asking for aninvestigation into the health insurance marketplace.
Specifically, the Justice Department considers a marketplace "highlyconcentrated" if a company's market share tops 42%. HCAN found 10states in which one or two companies control 80% or more of the market.In Alabama, home to Sen. Richard Shelby (R), one of the strongestopponents of reform, Blue Cross Blue Shield controls 83% of thestatewide market.
Individual insurance companies enjoy practical monopolies in manyparts of the country, which keeps prices high, profits high, andconsumers screwed. It's why the public option is seen as such a seriousthreat — it would introduce at least some competition, and offer consumers some choices. . . .