SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Obama Points to the Lack of Insurance Competition, a Problem His Plan No Longer Solves
Mar 08, 2010
The Obama administration, in its push to get the House to vote for
the Senate's health care reform bill unchanged, is pointing to the
serious issue of lack of competition
in the health insurance market as a powerful reason for reform. Obama's
health care proposal, however, no longer does much to actually solve
the problem. From the White House Blog:
On Wednesday, a leading insurance broker laid out in clear terms
what many Americans could already guess: the insurers' monopoly is so
strong that they can continue to jack up rates as much as they like -
even if it means losing customers - and their profits will continue to
soar under the status quo.Speaking about the lack of competition - a key target of reform -
broker Steve Lewis told investors on a conference call organized by
Wall Street giant Goldman Sachs:"Not only is price competition down
from year ago (when we had characterized last year's price competition
as being down from the prior year), but trend or (healthcare) inflation
is also up and appears to be rising. The incumbent carriers seem more
willing than ever to walk away from existing business resulting in some
carrier changes..."
The few elements of this health care reform push that could have
helped deal with the issue of "insurers' monopoly" have been removed,
and Obama is making no effort to add them back. In fact, his
administration is actively trying to suppress attempts by others to
reintegrate such measures into the legislation.
Repealing the anti-trust exemption was in the House bill-but it is
not in the Senate bill or Obama's health care proposal. Also in the
House bill, but missing from Obama's proposal, is a national exchange
and a national public health insurance option. All three proposals
could have helped with the issue of the monopoly power of insurers.
The Senate bill does, technically, contain money for new insurance
co-ops, but Kent Conrad (D-ND) and Max Baucus (D-MT) completely
crippled the co-ops with weird restrictions, which will protect the
current health insurance companies. The bill calls for one co-op per
state, even though that is unfeasible in small/mid-size states, and
co-ops are legally prevented from pooling their negotiating power to get better rates with providers. Baucus so crippled the co-ops program that the CBO says they are basically destined to fail.
If Democrats really want competition among many non-profit
insurers-like in Belgium, Germany, Japan, and Switzerland-and want to
bring down cost, then they need to create a central reimbursement negotiator
that would result in an all-payer system. Only when all insurers are
paying the same reimbursement rates, can new, small competitors ever
hope of breaking into a new market. As long as large size allows the
big monopoly insurers to get better rates with providers, you will
always have market share snowballing to a few big insurance companies.
The lack of competition, the monopoly power of the insurers, is a
huge problem with our health care system. Unfortunately, the Obama
administration has not made taking on the big insurance companies a
policy priority, and the president's proposal does not take the big
steps to fix the problem. If Obama really thought the reports, like
this one from Goldman Sachs, were the reason we need health care
reform, he would be fighting to include actual solutions to the
problem, like repealing insurers' anti-trust exemption, creating a
public option, a national exchange, a central reimbursement negotiator
(all-payer system), and/or making the co-ops at least workable.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
© 2023 FireDogLake
Jon Walker
Jon Walker is political writer who has written for FireDogLake, Vice, The Intercept, @TheProspect and The Week. He is an expert on health care policy and the politics of health care reform.
The Obama administration, in its push to get the House to vote for
the Senate's health care reform bill unchanged, is pointing to the
serious issue of lack of competition
in the health insurance market as a powerful reason for reform. Obama's
health care proposal, however, no longer does much to actually solve
the problem. From the White House Blog:
On Wednesday, a leading insurance broker laid out in clear terms
what many Americans could already guess: the insurers' monopoly is so
strong that they can continue to jack up rates as much as they like -
even if it means losing customers - and their profits will continue to
soar under the status quo.Speaking about the lack of competition - a key target of reform -
broker Steve Lewis told investors on a conference call organized by
Wall Street giant Goldman Sachs:"Not only is price competition down
from year ago (when we had characterized last year's price competition
as being down from the prior year), but trend or (healthcare) inflation
is also up and appears to be rising. The incumbent carriers seem more
willing than ever to walk away from existing business resulting in some
carrier changes..."
The few elements of this health care reform push that could have
helped deal with the issue of "insurers' monopoly" have been removed,
and Obama is making no effort to add them back. In fact, his
administration is actively trying to suppress attempts by others to
reintegrate such measures into the legislation.
Repealing the anti-trust exemption was in the House bill-but it is
not in the Senate bill or Obama's health care proposal. Also in the
House bill, but missing from Obama's proposal, is a national exchange
and a national public health insurance option. All three proposals
could have helped with the issue of the monopoly power of insurers.
The Senate bill does, technically, contain money for new insurance
co-ops, but Kent Conrad (D-ND) and Max Baucus (D-MT) completely
crippled the co-ops with weird restrictions, which will protect the
current health insurance companies. The bill calls for one co-op per
state, even though that is unfeasible in small/mid-size states, and
co-ops are legally prevented from pooling their negotiating power to get better rates with providers. Baucus so crippled the co-ops program that the CBO says they are basically destined to fail.
If Democrats really want competition among many non-profit
insurers-like in Belgium, Germany, Japan, and Switzerland-and want to
bring down cost, then they need to create a central reimbursement negotiator
that would result in an all-payer system. Only when all insurers are
paying the same reimbursement rates, can new, small competitors ever
hope of breaking into a new market. As long as large size allows the
big monopoly insurers to get better rates with providers, you will
always have market share snowballing to a few big insurance companies.
The lack of competition, the monopoly power of the insurers, is a
huge problem with our health care system. Unfortunately, the Obama
administration has not made taking on the big insurance companies a
policy priority, and the president's proposal does not take the big
steps to fix the problem. If Obama really thought the reports, like
this one from Goldman Sachs, were the reason we need health care
reform, he would be fighting to include actual solutions to the
problem, like repealing insurers' anti-trust exemption, creating a
public option, a national exchange, a central reimbursement negotiator
(all-payer system), and/or making the co-ops at least workable.
Jon Walker
Jon Walker is political writer who has written for FireDogLake, Vice, The Intercept, @TheProspect and The Week. He is an expert on health care policy and the politics of health care reform.
The Obama administration, in its push to get the House to vote for
the Senate's health care reform bill unchanged, is pointing to the
serious issue of lack of competition
in the health insurance market as a powerful reason for reform. Obama's
health care proposal, however, no longer does much to actually solve
the problem. From the White House Blog:
On Wednesday, a leading insurance broker laid out in clear terms
what many Americans could already guess: the insurers' monopoly is so
strong that they can continue to jack up rates as much as they like -
even if it means losing customers - and their profits will continue to
soar under the status quo.Speaking about the lack of competition - a key target of reform -
broker Steve Lewis told investors on a conference call organized by
Wall Street giant Goldman Sachs:"Not only is price competition down
from year ago (when we had characterized last year's price competition
as being down from the prior year), but trend or (healthcare) inflation
is also up and appears to be rising. The incumbent carriers seem more
willing than ever to walk away from existing business resulting in some
carrier changes..."
The few elements of this health care reform push that could have
helped deal with the issue of "insurers' monopoly" have been removed,
and Obama is making no effort to add them back. In fact, his
administration is actively trying to suppress attempts by others to
reintegrate such measures into the legislation.
Repealing the anti-trust exemption was in the House bill-but it is
not in the Senate bill or Obama's health care proposal. Also in the
House bill, but missing from Obama's proposal, is a national exchange
and a national public health insurance option. All three proposals
could have helped with the issue of the monopoly power of insurers.
The Senate bill does, technically, contain money for new insurance
co-ops, but Kent Conrad (D-ND) and Max Baucus (D-MT) completely
crippled the co-ops with weird restrictions, which will protect the
current health insurance companies. The bill calls for one co-op per
state, even though that is unfeasible in small/mid-size states, and
co-ops are legally prevented from pooling their negotiating power to get better rates with providers. Baucus so crippled the co-ops program that the CBO says they are basically destined to fail.
If Democrats really want competition among many non-profit
insurers-like in Belgium, Germany, Japan, and Switzerland-and want to
bring down cost, then they need to create a central reimbursement negotiator
that would result in an all-payer system. Only when all insurers are
paying the same reimbursement rates, can new, small competitors ever
hope of breaking into a new market. As long as large size allows the
big monopoly insurers to get better rates with providers, you will
always have market share snowballing to a few big insurance companies.
The lack of competition, the monopoly power of the insurers, is a
huge problem with our health care system. Unfortunately, the Obama
administration has not made taking on the big insurance companies a
policy priority, and the president's proposal does not take the big
steps to fix the problem. If Obama really thought the reports, like
this one from Goldman Sachs, were the reason we need health care
reform, he would be fighting to include actual solutions to the
problem, like repealing insurers' anti-trust exemption, creating a
public option, a national exchange, a central reimbursement negotiator
(all-payer system), and/or making the co-ops at least workable.
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.