Have you wondered why health insurance costs have skyrocketed in recent years?
And, are you inclined to think we need more competition in order to lower costs? If so, you’re probably hoping Congress will see fit to tighten anti-trust regulations in whatever health care reform measures come out of both houses, while the insurance companies are begging for exemptions. Fact is, the most egregious anti-trust infractions have already occurred, according to the blog Cab Drollery, published by a California attorney. Blogger Diane lays it all out, citing a Los Angeles Times story that explains how, during the Bush years, more than 400 health insurance mergers occurred under the noses of Justice Dept. watchdogs, who sniffed at only two: Health economist James Robinson found in 2003 that three large firms controlled more than 50% of enrollment in almost every state -- and that was before the biggest insurers launched a huge effort to snarf up their chief competitors, a trend exemplified by the 2004 mega-merger of WellPoint Health Networks Inc. and Anthem Inc. By 2008, according to the American Medical Assn., in nearly 90% of the metropolitan areas of the country, a single insurer controlled 30% or more of the market.
Is it merely a coincidence that health premiums have soared over the last decade -- up by 131% for family coverage from 1999 to 2009, according to the Kaiser Family Foundation?
"Competition in the health insurance industry is insufficient," Leemore S. Dafny, a health economist at Northwestern's Kellogg School of Management, told me last week. "It's becoming less competitive over time and it's causing higher premiums than we otherwise would see." [Emphasis added]See http://cabdrollery.blogspot.com/2009/11/red-herrings-are-not-kipper-snacks.html for the entire enlightening blogpost.
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