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By Josh Green, progressive guest columnist
I’m a free-marketer. I believe the free market is great for business growth, strong economies and innovation, but not so great for self-regulating and preventing abuses.
And I thought all my favorite conservatives out there favored free markets, too, until we got into the nitty gritty of health care reform. Then I learned that conservatives actually want to protect monopolies, the antithesis of the free market.
Monopolies, or oligopolies, are systems in which one or a few companies dominate a market to the point where competition is kept from flourishing. Companies with a dominant market share (think Microsoft or Google) can’t help themselves — they want to maintain that dominance, set pricing on their products that ensures large profits and basically keep any upstarts from ruining their good deal. This is why we have anti-trust laws — monopolies, we’ve found throughout history, kill competition, hurt consumer choice and are about as un-American and anti-capitalist as an institution can be.
Then why are conservatives defending the monopolies that health insurance companies enjoy throughout the United States?
Don’t believe it? The facts aren’t really in dispute.
Even the American Medical Association — which has been resisting real reform for decades because its doctor membership fears its six-figure plus salaries might take a small hit — admits in a report that 24 percent of all the metropolitan areas it surveyed has an insurer with 70 percent or more market share. Sixty-four percent of all markets have an insurer with more than 50 percent of the market.
Still don’t believe it? Check out the map yourself.
Anyone with business sense will tell you that those numbers give a false impression of a robust health care market. Those with a little more knowledge of the health care business will tell you that it’s no surprise that concentrations like this occur.
A health insurer is not in the business of trying to get into as many markets as it can nationwide. It’s in the business of spreading risk — translation: maximizing young, healthy people in its pool, and minimizing old, sick people. They want to cherry-pick the best markets, not offer insurance to rural folks or poor folks who tend to have higher health risks.
So we have a monopoly problem. Now what? Can we force insurers to get into markets they don’t want to? No. Can we ask an insurer in Texas to offer the same plan to someone in Michigan? Not even close. Insurance premiums are based on actuarial analysis of small geographic areas (we’re talking zip codes). Health care plans, insurers will tell you, don’t cross state lines as a matter of business strategy, not because the government is putting up walls. Insurers would never offer a national, cross-state, one-size-fits-all plan, it would be business suicide.
When conservatives rail against a public plan as if it’s the British National Health System, they are promoting monopolies and sinking competition. They’ve become exactly the opposite of what they claim to be. They want to be free-market cheerleaders, yet they’re cheering for the companies that conspire to clamp down on the free market. They claim they want costs to be brought under control, yet they want the magic of the free market (i.e. the insurers themselves) to do the controlling.
You cannot make an argument out of one side of your mouth that government is a clumsy, inefficient administrator of any service and should be kept out of health care, while out of the other side you argue that government is TOO efficient and has too many advantages over private insurers. It’s one or the other, but you can’t have both.
If you believe in the free market, you believe in providing an alternative — yes, even the dreaded public option, as much as it makes your stomach turn — to monopolistic companies who have no interest in keeping our bodies or the nation’s economy healthy.
Josh Green is a graduate student in political science at UC-Berkeley.
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