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Journal reporter takes issue with report
The Journal's expert on health care issues, staff writer Winthrop Quigley, questions the validity of the HCAN report. "We posted something from Health Care for America Now (a left-of-center, mostly SEIU-backed advocacy group) that claims Albuquerque's insurance market is 'highly concentrated,' " he wrote in an e-mail challenging the posting. "I saw that study weeks ago, reviewed it carefully and discovered so many factual errors that I discarded it as useless propaganda," Quigley wrote. Charlie Eisenhood's story on the report that prompted Quigley's reponse is below. Anyone else with their own take? We welcome your comments. Let the discussion begin.
A national study of health insurance coverage shows that, in many markets, there is monopolistic coverage by one or two companies. Albuquerque isn't immune.
Health Care for America Now (HCAN), a pro-public option advocacy group, just released a report that analyzes, state by state, the market share of health insurance companies. What it found was startling - 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."
According to the American Medical Association (AMA), 94% of insurance markets in the US are "highly concentrated," based on Justice Department standards. What that means is "that an insurer could raise premiums and/or reduce the variety of plans or quality of services offered to customers with impunity."
Indeed, premiums have increased, on average, 87% over the past six years. This, as "profits at 10 of the country's largest publicly traded health insurance companies in 2007 rose 428 percent from 2000 to 2007, from $2.4 billion to $12.9 billion, according to U.S. Securities and Exchange Commission filings."
If you're interested in the national numbers, go here.
But what about New Mexico and, in particular, Albuquerque? A 2008 study shows that New Mexico's health insurance premiums for working families shot up 92% from 2000 to 2007, 4.6 times faster than median earnings.
Although there are no city data about premiums, the HCAN report does show that Albuquerque is a highly concentrated market. The two largest insurance companies, Presbyterian and United Health, together held a 52% market share in 2008, giving ABQ a Justice Dept. concentration rating of 1,895 - over the 1,800 point threshold for high concentration. (The higher the number, the less competitive the market).
What is there to take away from this? There are many large, powerful companies with a strong interest in avoiding the injection of new competition into the health insurance market, whether through a health insurance exchange, a government option, or both. The status quo is a much more lucrative position than a reformed, more-competitive marketplace.
This helps to explain the millions of dollars given by the health insurance industry to our Senators and Representatives in Washington.
You can actually track the amount of money given by the health sector (which includes the health insurance industry) to politicians with Center for Responsive Politics' database tool. Many of the big players in shaping the health care debate have received tens of thousands, even millions of dollars from the sector.
Not surprisingly, given his pivotal role in shaping health care legislation, Sen. Jeff Bingaman (D-NM) received $348,263 from the health sector for his 2006 re-election campaign.
Sen. Bingaman supports a public health care option and sits on the HELP committee, which today leaked its ideas for a public plan.
Stay tuned to City Seeker for more health care coverage - next week I will be hosting a debate among a number of local pundits and experts about health care reform. Reader participation will be encouraged.
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