The trouble is that everyone that says it knows its a lie. The insurance companies are lobbying against a public option in order to protect their monopoly. The folks that are telling you they want the market status quo to protect choice and competition are actually defending less choice and competition.
Zachary Roth has a very good piece today pointing to a HCAN report documenting the fact that most Americans don't enjoy "anything like a competitive marketplace for health care."
The report, released by Health Care for America Now (HCAN), uses data compiled by the American Medical Association to show that 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 monster profits for the big health insurers. Premiums have gone up over the past six years by more than 87 percent, on average, while profits at ten of the largest publicly traded health insurance companies rose 428 percent from 2000 to 2007.
Far from healthy market competition, HCAN describes the situation as "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."
So extreme is the level of consolidation, in fact, that one former top Federal Trade Commission official working with HCAN has sent a letter to the Justice Department's Antitrust Division, asking for an investigation into the health insurance marketplace.
The Justice Department considers a marketplace "highly concentrated"(just a fancy term for monopolistic) if a company's market share tops 42%. HCAN found 10 states in which one or two companies control 80% or more of the market. In Alabama, home to Sen. Richard Shelby (R), one of the strongest opponents of reform, Blue Cross Blue Shield controls 83% of the statewide market.
The insurance companies are enjoying practical monopolies in many parts of the country and the result is high prices, high profits, and consumers in the corner. It's no wonder the insurance companies see the public option as such a serious threat -- it would introduce at least some competition, and offer consumers some choices.The next time someone tries to tell you that we need to protect the competiveness and competition in the health insurance industry just laugh and tell them to look at Alabama, Hawaii, Rhode Island, Alaska, Vermont, Maine, Montana, Wyoming, Arkansas and Iowa. These are all states where the two largest health insurers control at least 80 percent of the market.