Statement
Statement of Eve Weissman, Health Care Campaign Coordinator, NJ Citizen Action
NJ Health Care For America Now (HCAN) Tele Press Conference Release of New Report: "New Jersey Health-Plan Premiums Soar As Insurers Face Less Competition"
Friday, June 19, 2009, 11:00 a.m.
Good morning. My name is Eve Weissman and I am the Health Care Campaign Coordinator for NJ Citizen Action, the State's largest, independent citizen watchdog organization representing over 60,000 families and over 100 organizations across the State. NJ Citizen Action is a proud member of the Health Care For America Now (HCAN) Campaign, a grassroots alliance comprised of over 1,000 organizations representing over 30 million people in 46 states across the country. HCAN's goal is to pass health care reform in 2009 that guarantees high quality, affordable health care for all.
I am joined this morning by our partners and allies at BlueWave NJ, Communication Workers of America Local 1032, the NJ Main Street Alliance, and Campaign for America's Future to release a new report titled New Jersey Health-Plan Premiums Soar As Insurers Face Less Competition. As you'll hear, this report describes the lack of true competition in the private health insurance market and the devastating consequences for consumers and small businesses faced with soaring health care costs. The findings outlined in this report affirm the clear and urgent need for a strong public health insurance plan as a central component of national health care reform.
Mergers and industry consolidation have created a situation where a small number of large companies control everything from what they charge to what benefits they offer. In New Jersey, Horizon Blue Cross Blue Shield - our state's largest insurer - controls 43% of the State market. If one company holds more than 42% of a market the U.S. Justice Department would consider that market "highly concentrated." This means that an insurer could raise premiums and/or reduce the variety of plans or quality of services offered to customers with little fear of resistance. Many local New Jersey markets are even more highly concentrated. For example, in Ocean City, Horizon and Aetna together hold 74% of the market and in Newark and Union Horizon and Aetna comprise 58% of the market.
There are serious consequences associated with this type of market power and consolidation. Shrinking competition among health insurance companies is a major cause of spiraling health insurance costs. Across the country premiums have gone up more than 87% on average over the past six years. In New Jersey health insurance premiums for working families skyrocketed 71% — 4.7 times faster than wages — from 2000 to 2007.
Meanwhile, insurers are thriving in the anti-competitive marketplace. The industry's top executives are raking in huge amounts of money. Profits at ten of the country's largest publicly traded health insurance companies rose 428% from 2000 to 2007 (from $2.4 billion to $12.9 billion).
We need a robust national public health insurance plan to compete on a level playing field alongside private insurance companies to expand choice for individuals and business and drive competition on price and quality in local markets across the country. A public plan is necessary to drive down skyrocketing costs, promote efficiency, and improve quality of care across the health care system. A public health insurance plan can offer a benchmark for private plans and a source of stability for enrollees, especially those with the greatest medical needs.
We need healthy competition and choice: competition between a public health insurance plan and private plans allows people to get a better product at a better price. Health insurance companies have spent too long giving little access to bad coverage for huge premiums. We need a public health insurance plan, providing more and better choices to consumers in New Jersey and across the country, as part of national health care reform.
