Comments on: How a Few Private Health Insurers Are on the Way to Controlling Health Care

By: Underwriterguy

Underwriterguy — Fri, 11 Dec 2009 16:30:19 +0000

Two is better than one, but you have a valid point. Breaking into a market is expensive. A carrier usually has to “buy” market share by forgoing profit or even pricing below cost. If better provider contracts don’t follow, and soon, losses will mount. Hence the frequent churn in the small group market as carriers try to establish themselves.

By: Margaret Welman Paez

Margaret Welman Paez — Fri, 11 Dec 2009 01:01:58 +0000

But if there are only 2 private carriers in one market, how is this really competition?

By: Disgustedby this

Disgustedby this — Thu, 10 Dec 2009 17:21:09 +0000

The opening sentence is so politically motivated that it makes the remainder of the article seem questionable. In my opinion, the last sentence ia the only part of this article that rings true or has value. The inference of the article is that big health insurers should not be exempt from antitrust laws, to that I agree.

By: Underwriterguy

Underwriterguy — Thu, 10 Dec 2009 16:48:20 +0000

Reich knows better than what he claims in this post. Here’s how competition works in a local market. Each private carrier tries to extract the lowest reimbursement rates they can from local providers. Lower reimbursements mean lower rates which in turn means more customers. Obviously, the carrier with the largest market share usually gets the best deal as they can drop or threaten to drop a hospital or doc group from their network. Historically BX/BS plans have had the largest market share in many states. They are so ubiquitous that in some markets health insurance is called “Blue Cross” just as tissues are called “Kleenex.”
If we are to “bend the cost curve” it can only happen through increased competition among hospitals and doctors, PBMs and other suppliers. Price controls, such as “Medicare For All” with providers forced to accept Medicare reimbursement rates is one solution, but the history of price controls in this country is pretty ugly.