Health Insurers Fight a Public Plan, but Rarely Each Other

Business Week reports:

Health insurers are on board with many congressional proposals for health-care reform. But they are vociferously opposed to the creation of a publicly financed insurer, arguing that they couldn't possibly compete against a low-cost public plan that has no need to earn profits. They may have a point. Many economists say insurers face very little competition now across large swaths of the U.S.

Various studies have found that health insurance is one of the most concentrated markets in the U.S., and that the lack of competition may be one factor behind sharply rising premiums. Each year, the American Medical Assn. surveys the competitive landscape for commercial health insurers; the latest report found that out of 314 metropolitan areas across the nation, 94% can be defined as highly concentrated, with two companies or even a single provider dominating the market. In 15 states, one insurer has half or more of the entire market, and in seven states, a single insurer has 75% or more.

With many state laws preventing out of state competition: no wonder premiums are going up. If politicians where interested in health care reform, they would ban limits on out of state competition.