| Wondering why premium rates for health insurance are so high? Here are two recent headlines that shed some intense light on the problem. |
Most U.S. Metropolitan Areas Lack Competitive Health Insurance Market
Chicago Tribune, Oct. 26, 2011
Four out of five metropolitan areas in the United States lack a competitive health insurance market, according to a study just released by the American Medical Association. New data presented by the AMA demonstrate the degree of anticompetitive market clout that some health insurers have gained through mergers and acquisitions. Market domination can lead to market power that does harm to consumers and providers of care by raising and maintaining premium prices above competitive levels. In 24 states, the two largest health insurers had a combined market share of more than 70 percent, based on 2009 data.
GAO Finds Little Transparency in Health Care Costs
Washington Post, Oct. 26, 2011
The U.S. Government Accounting Office reports that it is incredibly difficult to find out how much money is spent on specific medical treatments, even with a number of health cost transparency efforts underway. The GAO found a whole host of obstacles stand in the way of transparent health care pricing, including incentives built into the system for healthcare providers and insurers not to make costs public.
What do these headlines mean?
Through a combination of years of state regulation that restricts healthy competition among health insurance companies and discourages the entry of new carriers into key markets, as well as the recent trend of health carriers to grow through mergers and acquisitions of their competitors, we are left with fewer and fewer choices in the market for health insurance in almost every major metropolitan area of the U.S. This means the dominant carriers have less competition and more ability to make price hikes stick.
Further, unlike almost every other commodity in a free market, the prices providers charge for health care are largely hidden from the public. As consumers, we do not know the cost of most treatments and health services beforehand and we have little ability to shop for higher quality or better prices in the market for health care.
How can these problems be solved? Most economists, both inside and outside government, point to the critical need for more, not less, competiion among private health insurance companies and far broader disclosure of the actual cost of health care treatments. Truly effective health reform would aim accomplish these two goals.
Fortunately, through the U-Haul Dealer Benefits Program, we strive to provide Dealers and their employees with a choice of competitive health insurance plans through our online comparison shopping tool. We’re put the U-Haul philosphy of “do it yourself” to work for you, so you can easily compare and enroll for coverage that fits what you want in health insurance.
We screen every plan. We show only the health carriers with the best claim-paying records authorized to operate in your state. Further, we look at the plans these carriers have filled and approved with your state department of insurance and we show only the plans that we think are the best value combination of benefit design and rates. Unfortunately, as the headlines attest, there are wide variations among the states. In some states, which encourage competition among carriers, we are able to compare dozens of plans. In other states, where years of regulation and mergers have reduced competition, very few choices are available.
You can test this for yearself, by simply looking up health plans in your zip code area and comparing the number of plans available with a zip code from another state. Get started. Click on the orange button in the middle top of the U-Haul Dealer Benefits homepage “Comparison Shop for Medical.”