Time For Some Insurance Competition
By Larry Johnson on October 21, 2009 at 3:06 PM in Current Affairs
Potential good news on the Hill today–Congress is going to withdraw the insurance industries’ monopoly status and anti-competitive business practice. I am a strong free market advocate. I love genuine capitalism. It ultimately will make people and society better. Unfortunately, we do not live in a “capitalist” system. We live in an economy that is heavily dependent on Government financing and limited competition. Take insurance, for example. If you have your car insurance in Maryland and move to Florida you will have to get a new insurance agent. The guy or gal you help employ in Maryland cannot do the same job for you in Florida.
What does this mean? Insurance companies have done a nifty job of avoiding competition and being able to set rates according to the local market. Well, that’s wrong. We should treat the United States as a single market. Let’s have some real competition. I find it shocking that several Republicans–who always claim to be for “free market” economics–are getting cold feet and want to keep the protectionist practices in place.
Brent Bowdowsky has a good piece (reprinted with his permission).
Go all out: End price-fixing by insurers
By Brent Budowsky – 10/21/09 09:59 AM ET
There is gathering momentum in both the House and Senate to repeal the antitrust exemption for insurers, which I proposed three weeks ago in my column, “Optional health deal.” The reaction I have received is powerful and electric. That column has been at the top, or near the top, of the most widely read pieces on thehill.com for three solid weeks, which is unheard of for a modest columnist such as myself.My phone has been ringing. The e-mails have been coming. Many from insider Democrats who believe it is time to end price-fixing by insurers, once and for all.
Why is the insurance industry allowed to do what would be illegal in virtually every other industry? Look at the number of states without real competition. Look at the premium increases in state after state, which can be called price-gouging.
Only yesterday one cable television segment described a disabled American who is being forced out of his insurance. An internal memo within the insurance company asked if they could eliminate coverage for all of these “dogs.”
This good patriotic American is fighting back by saying, “I am not a dog.” Disabled Americans are not dogs. No company should private call its good customers “dogs.” There is an attitude adjustment called for here and it is time to lay down the law, not let insurers be exempt from the law.
Eliminate the antitrust exemption. Restore the rule of law. Bring back real competition. Protect American consumers. End price-fixing. Now. Along with passing the public option. Enough is enough.
There are principled Republicans and conservatives who have supported antitrust laws that would end price-fixing and restore real competition. I applaud them.
There are other Republicans who have an outmoded and warped view that price-fixing is fine, that competition can be a charade. And there are Republicans who are simply bought and paid for by those who fix prices and others who call their disabled customers dogs when they think nobody is watching.
And there are a handful of Democrats who also place campaign donations ahead of protecting the public. They should be held to account as well.
We are watching. We should act. We should repeal the antitrust exemption for insurers fully and completely and make price-fixing, price-gouging and collusion illegal for insurers, as those practices are for other companies.
This is one of the health care reforms we need. What do you think?
(Release: November 13)
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[...] More here: Time For Some Insurance Competition [...]
I watched a video over on the CNN website. The man who is fighting the insurance company for calling him and others “dogs” [think the company was Guardian]has muscular dystrophy and is 100% disabled. He needs ’round the clock assistance and his bills are $1 mil per year. To withdraw insurance [and thereby medical intervention] is to basically condemn him to a death sentence. His alternative? A nursing home or fight.
He’s chosen the latter.
Certainly, there must be some way to include and continue to assist someone like this man without bankrupting the program. But to refer to any human being as a “dog,” which this outfit did in an internal memo, is a disgrace.
As for Republicans and/or Dems voting against enforcing anti-trust regulations on the insurance industry, I think we can fairly assume that these reps are in the industry pocket and are self-serving, not public servants. The insurance industry needs to be reined in and Representatives-For-Sale need to be given the boot.
Let the competition begin!!
I hope they do repeal the anti trust exemption. This is protecting price fixing/gouging.
But, repealing the anti trust exemption does not left stateline borders for insureres. And they must do this as well also. I wrote these very things to my critters again today asking for REAL reform.
Why do the Democrats always insist on just adding on, instead of fixing something? Al Gore did change that, but maybe that’s why very left liberals didn’t like Clinton/Gore. He reinvented Govt and cut out waste.
And why won’t they expand Medicare and fix it, instead of starting an entire new govt program with more waste?
If Dem;s are serious about competition bringing down prices, they can’t just repeat the republican’s talking points, they gave to mean it and do it. Stop protecting their special interests, that includes Lawyers and tort reform.
The Dem’s always want to compare us to other countries and Europe. Well fine, look at Europe and other countries, they don’t have these medical malpractice lawsuits. If a Doc does something bad, he gets prison, not trying to cash in.
Malpractice suits are on the rise in the UK … they call it the American Disease.
I agree. I just don’t understand why they can’t start with things they can fix–like working on Medicare fraud–and work incrementally till we have a reform that makes sense. It would probably be implemented in the same time frame, since we are going to be paying for health care reform for three years before we see any changes.
I also suggest some kind of doctors program where we forgive some of the student loans of doctors who work for 2 years in clinics in areas that are heavily uninsured. Might help with the doctor shortage, too.
Something like totally paying for Medical School if you contractually promise to practice in an under-served area for an agreed length of time would be good.
I was told by a U.S. nurse who was considering this that it was offered to him by Canada.
Yes, Ellen D! Didn’t know Canada had that. I wonder if the White House knows?
Why now? What took so long? This does not come down to a “few” Republicans. I have not heard any courageous Democrats calling for a repeal of this exemption over the decades it has been in place. All of those morons in Washington are in the pockets of whatever interest group is passing out cash at the moment. It has only now become an issue because the health insurance industry published a report that was not helpful to the healthcare disaster that Congressional Democrats want to shove down our throats. In the end, something else will take its place after the Democrats get what they want. Consumers will end up paying for it one way or the other.
Good article, Larry.
I’ve called for open competition between the Insurance companies from day one.
Just like the airlines, that were deregulated in the eighties: Once they had to compete with each other, their prices went DOWN.
I believe the same thing will happen when the Insurance companies are forced to compete across State lines, in a free market.
And ever since Reagan pilots are so overworked the safety of flying has gone DOWN. I’d rather pay a little more and know my pilot hasn’t been flying tandem without sleep.
huh?
never in the history of commercial aviation has it been safer to fly on U.S. carriers and, for that matter, most major airlines in the world
according to abc news commentator John J. Nance, ABC News’ aviation analyst, is a veteran 13,000-flight-hour airline captain, a former U.S. Air Force pilot and a lieutenant colonel in the Air Force Reserves. He is also a New York Times best-selling author of 17 books, a licensed attorney, a professional speaker, and a founding board member of the National Patient Safety Foundation.
But I guess you know better.
Really? Then why are millions of people climbing on to planes every day?
You’re more likely to die in a car crash than a plane crash. Get real.
I’m talking about bringing down the cost of insurance by opening the markets. You know, REAL competition(between the insurance companies) that doesn’t involve the Government.
That’s what Larry is advocating, and so am I.
I had a tenant about 10 years ago who was an airline pilot. Mandatory time off basically made his employment part-time. He and all of his buddies had other jobs/avocations on the side because they had so much time off. AND they were paid six-figure salaries!
That’s funny you bring that up, Patience, because I know a pilot, and he doesn’t make HALF of what he made years ago because of the time-off regulations. Also, he used to work for NW airlines, and everyone took a pay cut to save the airlines. Then the airlines screwed everyone.
Besides, tek’s argument is a red herring. No doctors are flying planes with 250 passengers in them. We’re talking about INSURANCE.
Big fan of repealing antitrust exemptions. Let insurance companies battle each other to lower the costs.
But, although I’m a fan of government assisting in protecting consumers, I don’t want them to get into the insurance business. No to public option.
I believe in regulated capitalism. The free market reintroduced by Bush caused this “recession.” The same thing caused the Great Depression. The totally free market does not correct itself; it’s stupid. We need regulations. Then, we need to get rid of subsidies and we need to establish accountability and oversight in government run social programs.
Sorry but recessions are not created or resolved by Presidents. They are a naturally recurring event in free-market capitalism. When a market becomes overvalued there is a recession to correct it.
However every recession exposes systemic problems in the market that have needed correcting. During Clinton there was corporate accounting problems (Sarbanes Oxley was enacted). During Bush it was the credit problem.
Please don’t buy into this charade that politicians play that they are responsible for a recession or a recovery. It just ain’t true.
Oh, are you referring to that “mark to market” bill that was crammed through days before Bill Clinton left office?
Crammed into a bill that was 1000 pages long that nobody read?
Why yes, that DE-regulation bill caused havoc.
Aye,aye.
Good opssible news–Let’s hope it is not one more carrot that leads to nowhere.
Also, there has always been a double standard in the U. S. Corporations don’t compete; they cooperate. Then they spend millions convincing average Americans that any kind of cooperation is socialism and it’s totalitarian.
Corporate brainwashing has been entirely successful as a result of a compliant media and our elected officials.
Democrats have failed to lead in areas where we expect them to be ahead of the corporate propoganda curve. Politicians are supposed to inform us and fight for us, and yes, protect us.
Since there is so much money spread throughout the congress by the monopolies, and jobs in insurance and other industries waiting for retiring politicians to insure their future, we the people don’t get the true facts. There is no emphasis or propoganda for the truth to the degree that the cartels spread their $billions around to lobbyists
and spread the corporate spiel.
Convincing average Americans is tough as our elected officials and media aren’t doing their jobs.
You and Tek are both morons who have obviously never worked for a corporation.
I’m guessing you both live in your Mommy’s basement.
Who creates jobs?
Not the Government, you morons, but small and large businesses that actually CREATE things.
The government doesn’t create, they DESTROY.
They suck up you taxes and create more jobs for themselves. And they whine when they actually have to work (ie, the POTUS).
Wake up you two morons. When your unemployment checks run out(or your mommy’s tolerance) you will learn what it means to WORK.
You blame the employer? The corporation?
Go try working for one of them, you losers!
They would kick your asses out within a week.
Let’s hope breaking up the financial cartels is the next step.
I remember when I moved down here in 79 there was a monopoly case decided where a judge said ” A company is too big if its share of the market is so big that it dissuades other companies from going into competition.”
I thought that was very succinct.
There is a billboard near my house that says (I paraphrase) “If you don’t see a Chase bank, just go down a block”. I think that sums up the current problem.
Maybe this is old news and I just didn’t notice before but I love the new Larry pix with the hat.
You’re right. That wasn’t there this morning! Good eyes!
I was going to make the same comment. He looks so much more relaxed.
Really nice, Larry!!!
Yes, I noticed that photo immediately. The other one always made me worry he had once been a Catholic priest or something–I couldn’t explain the collar. Yes, this new one is definitely more fun, and I can better picture him using some of the language he uses in some of his posts while wearing this get up. (Don’t worry–having taught high school, I’ve heard about everything. I’m unshockable.)
Complete chaos in the medical system should do us well and should suffice Obama’s and the Democrat’s ambition to bring the free market system to its knees. Socialism is what’s coming. The country will belong to the government and those operating it and Americans will resemble and have the same rights that Venezuelan’s have.
Just pray that you can land a job with the government. That’s all it matters. After that you’ll have it made.
Had the volume off during lunch but saw that Leahy (that dog) was being interviewed regarding this issue.
I can’t wait till the day insurance companies can cross state lines and are subjected to anti-trust laws. Now if they would only enforce the anti-trust and RICO laws on the books.
Thanks LJ.
You mean that the Dems are threatening to get something right? Be sure to read the fine print, though.
It will come down to a choice of 1) removing the monopolistic features of the insurance business today and 2) public option. I hope that it is the removal of the monopoly. I do not like the public option because the government is simply incapable of keeping costs down and maintaining quality of healthcare.
[...] See more here: Time For Some Insurance Competition : NO QUARTER [...]
A really fine article Larry. Yes, free market rule should prevail in Insurance of all kinds, and tort reform needs to change as well.
There are too many Democrats who belong to the insurance and drug monopolies and since these are critical times for reform, Democrats who resist levelling the playing field appear more deceptive every day.
Your article touches the most salient points before us in healthcare reform
We had the same agent for our auto insurance for 30 years until he retired.
Since then, our new agent shops the market for us each year, and the difference in quotes is astounding.
Possibly the same would apply to health insurance.
I see one problem though. Our area physicians are readily familiar with our insurance companies, and it saves a lot of time when they are certain a procedure will be approved.
P.S.
Love that Magnum P.I. look Larry!
Were you looking for BO’s birth certificate?
LOL!
Comanies that are too big to fail should be broken up.
If they still fail they need to fail.
btw, forgot to mention, like the new photo on front page of u larr
agree, cool pix. quite an improvement from the one with bangs.
Yes I was beginning to think you never smiled Larry. LOL
Great write up as usual.
Good information. Do wish animals would stop being used to make derogatory comments about humans. PETA ought to work to make it part of hate speech.
[...] More: Time For Some Insurance Competition : NO QUARTER [...]