NorthJersey.com

Advocacy Group: Health Insurance Companies Need More Competition

NorthJersey.com — Friday, June 19, 2009

BY LINDY WASHBURN
NorthJersey.com
STAFF WRITER

Lack of competition among health insurance companies in New Jersey causes skyrocketing premiums, and should be fixed with a strong public plan like the one proposed by President Obama, a national advocacy group said Friday.

"Freedom from genuine competition allows New Jersey insurers to reap oversized profits and raise premiums with impunity," according to the report by Health Care for America Now, a coalition of labor and community groups advocating national healthcare reform.

"When just a couple of companies hold a near-monopoly, they not only set the prices, they also make the rules and call the shots," said Eve Weissman, health care organizer for New Jersey Citizen Action.

The report cited the 43 percent market share of the state's largest insurer, Horizon Blue Cross and Blue Shield of New Jersey. According to federal anti-trust guidelines, that is considered "highly concentrated."

The report connected this market concentration with the 71 percent rise in insurance premiums statewide between 2000 and 2007. For family health coverage, premiums rose from $7,592 to $12,979 during that period, the report said.

A spokesman for Horizon said the report missed the big issue: The cost of medical care is rising.

"The reason premiums are increasing is the underlying cost of health care," said Tom Rubino, a Horizon vice president. Over the seven years cited, Horizon spent an average of 85 cents of every dollar received in premiums on healthcare, he said.

New Jersey is a high-cost state for health care, because of surplus hospital beds and the habits of the state's doctors, who tend to order more tests and procedures than doctors elsewhere, he said.

The report, "Premiums Soaring in Consolidated Health Insurance Market" was released in a conference call with New Jersey Citizen Action, the Communication Workers of America Local 1032, and an organizer from NJ Main Street Alliance.

"A strong public health insurance option is critical," said the report's author, Alex Lawson, of the Institute for America's Future. A plan like Medicare, offered as a choice to the public, would compete "on a level playing field with private health insurers — the only way we can inject real competition into the health-insurance market place."

Lack of competition among health insurance companies in New Jersey causes skyrocketing premiums, and should be fixed with a strong public plan like the one proposed by President Obama, a national advocacy group said Friday.

"Freedom from genuine competition allows New Jersey insurers to reap oversized profits and raise premiums with impunity," according to the report by Health Care for America Now, a coalition of labor and community groups advocating national healthcare reform.

"When just a couple of companies hold a near-monopoly, they not only set the prices, they also make the rules and call the shots," said Eve Weissman, health care organizer for New Jersey Citizen Action.

The report cited the 43 percent market share of the state's largest insurer, Horizon Blue Cross and Blue Shield of New Jersey. According to federal anti-trust guidelines, that is considered "highly concentrated."

The report connected this market concentration with the 71 percent rise in insurance premiums statewide between 2000 and 2007. For family health coverage, premiums rose from $7,592 to $12,979 during that period, the report said.

A spokesman for Horizon said the report missed the big issue: The cost of medical care is rising.

"The reason premiums are increasing is the underlying cost of health care," said Tom Rubino, a Horizon vice president. Over the seven years cited, Horizon spent an average of 85 cents of every dollar received in premiums on healthcare, he said.

New Jersey is a high-cost state for health care, because of surplus hospital beds and the habits of the state's doctors, who tend to order more tests and procedures than doctors elsewhere, he said.

The report, "Premiums Soaring in Consolidated Health Insurance Market" was released in a conference call with New Jersey Citizen Action, the Communication Workers of America Local 1032, and an organizer from NJ Main Street Alliance.

"A strong public health insurance option is critical," said the report's author, Alex Lawson, of the Institute for America's Future. A plan like Medicare, offered as a choice to the public, would compete "on a level playing field with private health insurers — the only way we can inject real competition into the health-insurance market place."

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