Study Shows Low Competition Among Health Insurers Is Costing Patients
by Mary Rettig
May 9, 2006
(AgapePress) - - The American Medical Association (AMA) says a study it conducted shows there is extremely limited competition between health insurance providers in many metropolitan areas of the United States, and this has heavy implications for Americans. The AMA looked at nearly 300 metropolitan areas in the U.S. from 1995 to 2005 to determine what happened after a decade of unprecedented mergers and takeovers in the health insurance industry. The study found that in 56 percent of the markets, a single insurance company had a market share of 50 percent or greater.
Dr. Jim Rohack, the immediate past chairman of the AMA's Board of Trustees, says this lack of competition is very bad for the consumers. He says the researchers found that, under the kind of market consolidation they saw, patients had fewer insurance options and higher premiums. Also, due to those high costs, more people were uninsured.
"And the only one that was benefiting was the company itself, making record profits," Rohack adds. "Patients had less choice [in terms of] the health insurance that they could purchase, and we also found that the premiums had increased," he says, "yet the benefits provided to patients did not increase."
According to the former AMA Board of Trustees chairman, more competition among health insurance companies leads to lower costs for consumers as well as better healthcare, because it means patients have more choices. However, he says the recent study indicates that competition among the insurance carriers is on a steep decline, while health insurance premiums are rising quickly.
Rohack says the AMA's study will be turned in to the U.S. Department of Justice. That agency, he notes, will look further into the matter to determine whether any anti-trust laws have been violated by the insurance companies.
Mary Rettig, a regular contributor to AgapePress, is a reporter for American Family Radio News, which can be heard online.
