Monday, June 22, 2009

Competition and public option health insurance

Paul Krugman has an interesting blog post today on competition in the health insurance industry, citing a post from Digby. The US senators opposing a public option claim that they are trying to protect competition in the market for health insurance. Digby takes Senator Blanche Lincoln to task for defending competition in Arkansas, where Blue Cross/Blue Shield holds 75% of the market, and where a public provider could potentially provide the only real competition. Krugman hypothesizes that there is likely to be little competition in many of the states whose senators are labeling a public option as a threat to competition.

Digby notes that the US Department of Justice classifies any market in which the leading provider holds a market share of 42% or more as "highly concentrated." This GAO report on small group health insurance providers (Table 1, pages 4-6)shows, in 27 of 47 reporting states, the leading provider has a market share of 42% or more, sometimes much more. Omitting the 7 states listed as NA, in 27 of 40 states for which sufficient data were available the market is highly concentrated. Small group coverage is defined differently in the various states, but it describes the insurance available to small firms (in 45 of the 47 reporting states, 50 employees is the maximum firm size considered as small group.)

In a related matter, Nate Silver discusses recent opinion polls concerning the public's thoughts on a federal government public option, with posts discussing the New York Times poll and other polls. Based on the polls that Nate considers most reliable, it looks like the public option has strong public support, with about 2/3 of the public liking the idea of a public option.


1 comment:

Elrond Hubbard said...

Also, here's Nate Silver pointing out George Will's admission that public health care would be cheaper . . . but Will says this would be unfair to the free market.

Me, I pay something like $130 a month for health insurance with a $5000 deductible, and recently NPR talked about single payers like me getting jilted by their insurance companies when a large medical expense comes along.