Post by unlawflcombatnt on Aug 18, 2010 3:22:50 GMT -6
www.americanprogress.org/issues/2010/06/enforcing_reform.html
Enforcing Reform
By David Balto
June 4, 2010
"We have reached a critical juncture in the evolution of the health insurance marketplace: healthcare reform will soon be implemented, and a number of provisions seek to promote competition between health insurers. The Federal Trade Commission and the Justice Department’s Antitrust Division each play central roles in protecting competition and, in turn, protecting consumers. For the new reforms to be effective in expanding access to affordable, high-quality health insurance products, these competition regulators must meet the challenge of policing health insurers in the post-reform era.
If there is 1 undisputed fact from the healthcare debate, it is that health insurance markets are broken. More than 47 million Americans are uninsured, and according to Consumer Reports, as many as 70 million more have insurance that doesn’t really protect them. A study released last May by Healthcare for America Now detailed just how concentrated health insurance markets are: at that time, 94% of statewide health insurance markets were considered “highly concentrated” under Justice Department guidelines, and in most states only one or two insurers dominate the market. This concentration has been accompanied by rising premiums and health insurer profits.
The Bush administration failed to properly set enforcement priorities, leading to an environment where health insurers thrived in a competition-free zone. During the previous administration, the FTC brought 31 enforcement cases against providers, frequently small groups of doctors. These cases were not based on evidence that physician costs were a significant force in increasing healthcare expenditures. Moreover, none of these cases was followed by a private suit seeking damages for the alleged illegal conduct.
While inexplicably focusing exclusively on healthcare providers, the FTC and the Justice Department let health insurers run amok, increasing market share while flagrantly violating consumer protections. The FTC and the Justice Department took no consumer protection actions against health insurers, and the Justice Department took no enforcement actions against anticompetitive practices by health insurers. State insurance regulators failed to consistently or effectively police health insurers. Meanwhile, there were more than 400 health insurance mergers in the past decade, with only two modest consent decrees.
The new healthcare reform legislation seeks to begin to restore heath insurance competition in a number of ways. For example, it creates state health insurance exchanges, which would serve as central marketplaces for consumers seeking individual private insurance plans. The market for these individual plans today is anything but consumer-friendly, and there are egregious examples of rescission, coverage denials and “junk” plans. The exchanges established by healthcare reform are intended to provide some uniformity to the process of comparing individual health insurance options, inserting direct competition where uncertainty and deception currently reign.
The FTC and the Justice Department should support reform by addressing the chronic competition and consumer protection problems in health insurance markets. I propose that the FTC and the Justice Department:
David Balto is a Senior Fellow at the Center for American Progress and former policy director of the Federal Trade Commission’s Bureau of Competition.
This article was originally published in Modern Healthcare.
Enforcing Reform
By David Balto
June 4, 2010
"We have reached a critical juncture in the evolution of the health insurance marketplace: healthcare reform will soon be implemented, and a number of provisions seek to promote competition between health insurers. The Federal Trade Commission and the Justice Department’s Antitrust Division each play central roles in protecting competition and, in turn, protecting consumers. For the new reforms to be effective in expanding access to affordable, high-quality health insurance products, these competition regulators must meet the challenge of policing health insurers in the post-reform era.
If there is 1 undisputed fact from the healthcare debate, it is that health insurance markets are broken. More than 47 million Americans are uninsured, and according to Consumer Reports, as many as 70 million more have insurance that doesn’t really protect them. A study released last May by Healthcare for America Now detailed just how concentrated health insurance markets are: at that time, 94% of statewide health insurance markets were considered “highly concentrated” under Justice Department guidelines, and in most states only one or two insurers dominate the market. This concentration has been accompanied by rising premiums and health insurer profits.
The Bush administration failed to properly set enforcement priorities, leading to an environment where health insurers thrived in a competition-free zone. During the previous administration, the FTC brought 31 enforcement cases against providers, frequently small groups of doctors. These cases were not based on evidence that physician costs were a significant force in increasing healthcare expenditures. Moreover, none of these cases was followed by a private suit seeking damages for the alleged illegal conduct.
While inexplicably focusing exclusively on healthcare providers, the FTC and the Justice Department let health insurers run amok, increasing market share while flagrantly violating consumer protections. The FTC and the Justice Department took no consumer protection actions against health insurers, and the Justice Department took no enforcement actions against anticompetitive practices by health insurers. State insurance regulators failed to consistently or effectively police health insurers. Meanwhile, there were more than 400 health insurance mergers in the past decade, with only two modest consent decrees.
The new healthcare reform legislation seeks to begin to restore heath insurance competition in a number of ways. For example, it creates state health insurance exchanges, which would serve as central marketplaces for consumers seeking individual private insurance plans. The market for these individual plans today is anything but consumer-friendly, and there are egregious examples of rescission, coverage denials and “junk” plans. The exchanges established by healthcare reform are intended to provide some uniformity to the process of comparing individual health insurance options, inserting direct competition where uncertainty and deception currently reign.
The FTC and the Justice Department should support reform by addressing the chronic competition and consumer protection problems in health insurance markets. I propose that the FTC and the Justice Department:
David Balto is a Senior Fellow at the Center for American Progress and former policy director of the Federal Trade Commission’s Bureau of Competition.
This article was originally published in Modern Healthcare.