Politics

Insurance Companies Benefiting from Rising Premiums, Lack of Competition

By Karina

A new analysis of the health insurance market by Goldman Sachs shows big insurance companies are taking advantage of limited competition by aggressively raising premiums and other costs on consumers. Over the last several years, the health insurance industry has become increasingly concentrated?giving consumers fewer and fewer meaningful choices in shopping for health insurance. According to a recent study by the AMA, there have been more than 400 mergers among health insurers in the past 14 years and as this map shows, many areas of our country are dominated by just one or two private insurers today:

In fact, Goldman Sachs is recommending that investors buy shares in two big insurance companies ? the UnitedHealth Group and Cigna ? because the potential for profit is high.

This report comes on top of recent news reports showing insurance company monthly premium increases in the double-digits in several states–just yesterday, Illinois residents discovered they will be paying as much as 60 percent more. As part of the larger effort to reform health insurance industry practices, the House passed the Health Insurance Industry Fair Competition Act last month to repeal the blanket antitrust exemption afforded to health insurance companies. Under the bill, health insurers will no longer be shielded from legal accountability for price fixing, dividing up territories among themselves, sabotaging their competitors in order to gain monopoly power, and other such anti-competitive practices.

President Obama and Democrats in Congress are proposing comprehensive health insurance reform, in which American consumers have access to affordable, high quality care and will no longer have to bear the burden of unfair and egregious health insurance premium increases. As President Obama said yesterday:

We can?t have a system that works better for the insurance companies than it does for the American people. We need to give families and businesses more control over their health insurance and that?s why we need to pass health care reform; not next year, not five years from now, not 10 years from now, but now.

Full post as published by The Gavel on March 09, 2010 (boomark / email).