Insurance Competition

[SSSMDt]

Have there been any economic studies or valid projections that say how much healthcare costs would lower if the US were to increase insurance competition across state lines?

And is this the right forum for a question like this?

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[SSSMDt]

the regulatory system for insurance is almost entirely state based. Putting aside the economic question, opening up health insurance across state lines would require a new federal regulatory system to manage it. you simply cant have national private insurance pool without national regulatory system

some economists have thought that a national insurance marketplace would likely decrease competition and thus increase costs as only the largest insurance companies compete on that scale

Thanks for that insight gonnif

 

[ChrisMack390]

This is not a real idea. It's something Republicans say so it seems like they have an idea for healthcare other than "**** it".

 

[Lucca]

If you want to know how super special awesome "free" markets are at lowering costs with competition in public service sectors just look at the Telecommunications Act of 1992 passed under the Clinton White House (the telecom companies had donated very large sums to Clinton's campaign). Same ****: "free market competition means lower prices and higher quality for all!". We know the result: a small monopoly of massive companies. Almost instantly after the act there were a huge number of mergers and cable prices went up by 50% almost overnight and phone prices went up by 20%. Plenty of economic studies on similar situations.

What people actually mean when they say "competition" is competition between concentrated capital which, without regulation, can achieve near monopolies almost instantly. They don't actually mean competition with new players. Even the business buzzword "disruption" just means a small player does something well enough (or captures enough of a new market) to eventually be purchased and incorporated into one of the small monopolies able and willing to buy it outright. In the public service sector you need to rely on infrastructure provided by the public (phone lines, the electric grid etc) so it only makes the handout to private capital that more egregious.

The suggestion that this type of "competition" is going to lower healthcare costs and expand accessibility and equity is a total ****ing joke. The joke is only made worse by the fact that healthcare financing does not in any way guarantee any changes to the healthcare system which needs to itself be structured in such a way to be capable of delivering services in a way that is equitably accessible and cost efficient.

 

[libertyyne]

Thanks for that insight gonnif

Also free markets tend to have problems when there is information asymmetry amongst the seller(providers) and the buyer(patients).
There is also the hiccup with insurance companies where they have to negotiate with local healthcare systems for reimbursement so it is not as simple as open the cross border competition and magically this system will start working. As entrenched providers and insurers have perverse incentives to either not take the new plans or charge them Soo much that it becomes unfeasible for those new plans to function. See- a recent insurer pulling out of multiple states.

 

[Lawpy]

Have there been any economic studies or valid projections that say how much healthcare costs would lower if the US were to increase insurance competition across state lines?

And is this the right forum for a question like this?

You can see (general) stuff on health insurance markets here:

http://forums.studentdoctor.net/threads/sdn-collection-of-healthcare-resources.1209167/

The specific answers are covered well by @gonnif and @Lucca

 

[SSSMDt]

You can see (general) stuff on health insurance markets here:

http://forums.studentdoctor.net/threads/sdn-collection-of-healthcare-resources.1209167/

The specific answers are covered well by @gonnif and @Lucca

Wow this is a great resource, something I have really been looking for. Thanks Lawper.

 

[SSSMDt]

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double post

 

[deleted480308]

you simply can't ban pre-existing exclusions, ban lifetime maximums, continue to demand more and more things to be covered and have insurance be cheap. It's completely imaginary to expect those things without it costing a crap ton of money

 

[deleted480308]

I can think of a simple idea .... Replace private for-profit health insurance companies with non-profit insurers. For-profits spend only 80% of premiums actually on care, non-profits around the world spend around 95%.....

non-profits are already allowed. If they were so much more efficient they would have priced out the for profit ones.....they aren't.

 

[libertyyne]

I can think of a simple idea .... Replace private for-profit health insurance companies with non-profit insurers. For-profits spend only 80% of premiums actually on care, non-profits around the world spend around 95%.....

This does nothing to curb spending. Medical loss ratios have already been set at a certain Percentage,this only incentivises them to increase spending because more spending means the set percentage constitutes a larger dollar amount.