Studies show that competition among health insurance companies has already decreased significantly.
Press Release Service – Wired PR News – Many critics of President Barack Obama’s plan for health care reform in the United States propose it will negatively impact competition among private insurers. As reported by the Associated Press (AP), studies suggest that a decrease in competition is already a factor in the industry, brought on by private insurers themselves.
As noted in the report, in cities such as Maine, the market is dominated by one particular company. Wellpoint Inc. is said to have held 71 percent of the market share in 2008.
Linda Blumberg, an economist and co-author of a report on the issue, is quoted by the AP as stating, “Right now, there’s no incentive for insurers or big hospital groups to negotiate with each other, because they can pass higher payments on through premiums… A public plan would have the leverage to set lower payment rates and get providers to participate at those rates.”
Blumberg is further quoted to state, “The private plans would come back to the providers and say, ‘If you don’t negotiate with me, you’re going to be left with only the public plan… Suddenly, you have a very strong economic incentive for them to negotiate.”
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