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WASHINGTON – One of the most widely accepted arguments against a government medical plan for the middle class is that it would quash competition — just what private insurers seem to be doing themselves in many parts of the U.S.

Several studies show that in lots of places, one or two companies dominate the market. Critics say monopolistic conditions drive up premiums paid by employers and individuals.

For Democrats, the answer is a public plan that would compete with private insurers. Republicans see that as a government power grab. President Barack Obama looks to be trapped in the middle of an argument that could sink his effort to overhaul the health care system.

Even lawmakers opposed to a government plan have problems with the growing clout of the big private companies.

Answer Question

Asked by sweet-a-kins at 9:35 PM on Aug. 22, 2009 in Politics & Current Events

Level 34 (67,502 Credits)
Answers (8)
  • "There is a serious problem with the lack of competition among insurers," said Republican Sen. Olympia Snowe of Maine, one of the highest-cost states. "The impact on the consumer is significant."

    Wellpoint Inc. accounted for 71 percent of the Maine market, while runner-up Aetna had a 12 percent share, according to a 2008 report by the American Medical Association.

    Proponents of a government plan say it could restore a competitive balance and lead to lower costs. For one thing, it wouldn't have to turn a profit.

    A study by the Urban Institute public policy center estimated that a public plan could save taxpayers from $224 billion to $400 billion over 10 years by lowering the cost of proposed subsidies for the uninsured, while preserving private coverage for most people.

    Answer by sweet-a-kins at 9:35 PM on Aug. 22, 2009

  • Anti-trust laws are already on the books and used quite often to keep the market place on even ground. The monopoly argument is a red herin to shift focus.

    Answer by jesse123456 at 9:50 PM on Aug. 22, 2009

  • The federal government does not belong in the healthcare business. It should be a state project. If states want to do a public option, that's great. I'm all for it. Also, you should be able to shop for insurance across state lines.

    Answer by lovinangels at 10:21 PM on Aug. 22, 2009

  • it's red herring, not herin

    Answer by Anonymous at 10:31 PM on Aug. 22, 2009

  • I just read an article today that stated private insurance companies have almost no competition as it is. This is not surprising to me nor is it surprising that these same companies do not support the reform idea. They don't want any competition so they can keep their profits up. At this point, it isn't the government that is denying care--it is private insurance companies.

    Answer by PsWifey at 10:38 PM on Aug. 22, 2009

  • Did anyone mention that we don't have the money for this health care reform? I think Sweetakins didn't get the memo and keep avoiding answering the question of how much it will cost.


    Answer by Anonymous at 11:40 PM on Aug. 22, 2009

  • nice try anon but sweetakin doesn't quite get it.

    Answer by Carpy at 12:22 AM on Aug. 23, 2009

  • Any other arguments aside, it's a good point. My ins co is the largest in our state, with the largest market share. It operates under a parent co umbrella - by putting the state in the name, it's just slightly different. But it, along with 39 other baby ins cos - make up the overall ins co that I have.

    There are a ton of little cos here in the state. My bff has been on about 5 of them in the past two years, as her DHs co is wonderful for doing the benefit hop, where they hop up to 3 times a year to a different co.

    My company may not "operate across state lines" but what is and is not covered comes down from the parent co. Because the ins is through a large organization, they have more bargaining power to insist the ins co offer a good plan. A lot of businesses can't do that, and are at the mercy of the ins co telling them what will be provided, and what the business and its emp will pay. We are at the ins co mercy

    Answer by LiliM at 3:24 AM on Aug. 23, 2009

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