A WARNING TO HEED…. Earlier this week, a highly regarded insurance broker painted a disconcerting picture — a health insurance marketplace that features so much concentration and so many monopolies, insurers are “willing to raise prices and lose customers in an effort to improve their bottom line.”
It was a warning Obama administration officials want policymakers to take seriously.
To bolster the case for a far-reaching overhaul of the health care system, the Obama administration is seizing on a new analysis by Goldman Sachs, the New York investment bank, recommending that investors buy shares in two big insurance companies, the UnitedHealth Group and Cigna, because insurance rates are up sharply and competition is down.
White House officials on Saturday said that the Goldman Sachs analysis would be a “centerpiece” of their closing argument in the push for major health care legislation. The president and Democratic Congressional leaders are hoping to win passage of the legislation before the Easter recess. Republicans remain fiercely opposed to the bill.
The Goldman Sachs analysis shows that while insurers can be aggressive in raising prices, they also walk away from clients because competition in the industry is so weak, the White House said. And officials will point to a finding that rate increases ran as high as 50 percent, with most in “the low- to mid-teens” — far higher than overall inflation.
The analysis could be a powerful weapon for the White House because it offers evidence that an overhaul of the health care system is needed not only to help cover the millions of uninsured but to prevent soaring health care expenses from undermining the coverage that the majority of Americans already have through employers.
As a friend of mine noted the other day, “Those who oppose health care reform because they like their coverage have it backwards.”
Expect to hear quite a bit more about this, especially when HHS Secretary Kathleen Sebilius appears on the Sunday shows this morning.