Today's Article
A federal study
released in November
2009 reveals that the
insurance industry is
largely responsible for
the explosion in
America's health care
costs.
released in November
2009 reveals that the
insurance industry is
largely responsible for
the explosion in
America's health care
costs.
The American Spark
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Health Insurance Industry Is The Problem, Not The Solution
By Cliff Montgomery - Mar. 20th, 2010
A Congressional Research Service study released in November 2009 reveals that the U.S. insurance industry
is directly responsible for much of the explosion in America's health care costs.
It's therefore absurd to expect the private health insurance industry to serve as a solution to these spiraling
costs, as they helped create the current economic drain on average American citizens.
Below The American Spark prints several of the most telling quotes from the report:
"Congress is now considering several proposals to reform the U.S. health care system and address the twin
challenges of constraining rapid growth of health care costs and expanding access to high-quality health care."
[...]
"Health care costs in the United States, which have risen rapidly in real terms in the last few decades, have
strained state and federal budgets. Future growth in health care costs is projected to threaten the fiscal
position of state and federal governments unless major policy changes occur.
"Additionally, for many Americans, the lack of health insurance coverage complicates access to health care.
According to the U.S. Census Bureau, 46.3 million or 15.4% of the people in the United States lack health
insurance coverage.
"Furthermore, even families with health insurance may become vulnerable to the financial burdens of a serious
health condition or illness either because of the narrowness of plan benefits or the unpredictability of decisions
about what care is covered. Increases in health insurance premiums, according to some research, has
degraded access to health care.
"Health insurance markets are often highly concentrated with one insurer accounting for over 50% of the
market. Concerns about concentration in health insurance markets are linked to wider concerns about the
cost, quality, and availability of health care." [...]
"The health insurance market has many features that can hinder markets, lead to concentrated markets, and
produce inefficient outcomes.
"Furthermore, the health insurance market is tightly interrelated with other parts of the health care system.
Health insurers are intermediaries in the transaction of the provision of health care between patients and
providers: reimbursing providers on behalf of patients, exercising some control over the number and types of
services covered, and negotiating contracts with providers on the payments for health services. Consequently,
policies affecting health insurers will likely affect the other parts of the health care sector.
"Evidence suggests that health insurance markets are highly concentrated in many local areas. Many large
firms that offer health insurance benefits to their employees have self-insured, which may put some
competitive pressure on insurers, although this is unlikely to improve market conditions for other consumers.
"The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced
output—high premiums and limited access to health insurance—combined with high profits [for the insurance
companies].
"Many other characteristics of the health insurance markets, however, also contribute to rising costs and
limited access to affordable health insurance. Rising health care costs, in particular, play a key role in rising
health insurance costs.
"Health costs appear to have increased over time in large part because of complex interactions among health
insurance, health care providers, employers, pharmaceutical manufacturers, tax policy, and the medical
technology industry. Reducing the growth trajectory of health care costs may require policies that affect these
interactions.
"Policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger
cost growth and limited access problems."
Like what you're reading so far? Then why not order a full year (52 issues) of The American Spark
e-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
By Cliff Montgomery - Mar. 20th, 2010
A Congressional Research Service study released in November 2009 reveals that the U.S. insurance industry
is directly responsible for much of the explosion in America's health care costs.
It's therefore absurd to expect the private health insurance industry to serve as a solution to these spiraling
costs, as they helped create the current economic drain on average American citizens.
Below The American Spark prints several of the most telling quotes from the report:
"Congress is now considering several proposals to reform the U.S. health care system and address the twin
challenges of constraining rapid growth of health care costs and expanding access to high-quality health care."
[...]
"Health care costs in the United States, which have risen rapidly in real terms in the last few decades, have
strained state and federal budgets. Future growth in health care costs is projected to threaten the fiscal
position of state and federal governments unless major policy changes occur.
"Additionally, for many Americans, the lack of health insurance coverage complicates access to health care.
According to the U.S. Census Bureau, 46.3 million or 15.4% of the people in the United States lack health
insurance coverage.
"Furthermore, even families with health insurance may become vulnerable to the financial burdens of a serious
health condition or illness either because of the narrowness of plan benefits or the unpredictability of decisions
about what care is covered. Increases in health insurance premiums, according to some research, has
degraded access to health care.
"Health insurance markets are often highly concentrated with one insurer accounting for over 50% of the
market. Concerns about concentration in health insurance markets are linked to wider concerns about the
cost, quality, and availability of health care." [...]
"The health insurance market has many features that can hinder markets, lead to concentrated markets, and
produce inefficient outcomes.
"Furthermore, the health insurance market is tightly interrelated with other parts of the health care system.
Health insurers are intermediaries in the transaction of the provision of health care between patients and
providers: reimbursing providers on behalf of patients, exercising some control over the number and types of
services covered, and negotiating contracts with providers on the payments for health services. Consequently,
policies affecting health insurers will likely affect the other parts of the health care sector.
"Evidence suggests that health insurance markets are highly concentrated in many local areas. Many large
firms that offer health insurance benefits to their employees have self-insured, which may put some
competitive pressure on insurers, although this is unlikely to improve market conditions for other consumers.
"The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced
output—high premiums and limited access to health insurance—combined with high profits [for the insurance
companies].
"Many other characteristics of the health insurance markets, however, also contribute to rising costs and
limited access to affordable health insurance. Rising health care costs, in particular, play a key role in rising
health insurance costs.
"Health costs appear to have increased over time in large part because of complex interactions among health
insurance, health care providers, employers, pharmaceutical manufacturers, tax policy, and the medical
technology industry. Reducing the growth trajectory of health care costs may require policies that affect these
interactions.
"Policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger
cost growth and limited access problems."
Like what you're reading so far? Then why not order a full year (52 issues) of The American Spark
e-newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
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