Report Released

Here is the full text of the Press Release

For Immediate Release Contact:May 20, 2009
Rico X (615) 438-3185
Tom Peters (615) 719-7218

Health Insurance Company Mergers Cause

Higher Premiums for Tennesseans

Health Care for America Now Report Shows Tennessee Health Insurance Companies Use Near-Monopolies to Set Prices

Nashville, TN – The Tennessee coalition of the Health Care for America Now campaign, released a new report today showing that consolidation in the private health insurance industry is creating skyrocketing premiums for both patients and employers. In Tennessee, the state and most metropolitan areas are considered “highly concentrated” under U.S. Department of Justice guidelines. This kind of consolidation means that an insurer can, without fear of consequences, raise premiums and/or reduce the variety of plans or quality of services offered to customers.

Health insurance premiums for Tennessee working families have increased 62 percent from 2000 to 2007. At the same time, the median earnings of Tennessee workers increased 12 percent $22,863 to $25,639. That means health insurance premiums for Tennessee working families have risen 5.1 times faster than wages.

“When just a couple of companies hold a near-monopoly, they not only set the prices, but they also make the rules and call the shots,” said Tom Peters of Tennessee Citizen Action. “Private health insurance companies have proven year after year they’ll do whatever they want when left to their own devices. It’s time for real comprehensive reform that includes regulation and the choice of a public health insurance plan so we are no longer at the mercy of the private health insurers in Tennessee.”

The American Medical Association reports that the health insurance marketplace is dangerously concentrated with 94 percent of local markets in the United States currently considered highly concentrated. And contrary to what the health insurance industry claims, these mergers have undermined market efficiency. Premiums nationwide have gone up an average of more than 87 percent over the past six years.

“There is no real choice or competition in the private health insurance market, and only giving everyone the option of a public health insurance plan will guarantee we get quality, affordable health care we all can count on this year,” said Tony Garr from Tennessee Health Care Campaign. “A public health insurance option will force private health insurance companies to control cost, guarantee quality, stop hiding what they will and won’t cover, and put people’s health before corporate profit.”

Some facts about the insurance industry in Tennessee:

• Blue Cross Blue Shield of TN, Tennessee’s biggest health insurer, controls 45% percent of the state’s market. Blue Cross Blue Shield and United Health Group together hold 61% percent of the market. When a firm has more than a 42 percent share of a single market, the U.S. Justice Department considers that market to be “highly concentrated.”

• Nine out of Ten local markets have higher concentration levels that the state. For instance, in Johnson City the top two insurers (BlueCross BlueShield and Cariten Health Care) together control 70 percent of the market.

• For family health coverage in Tennessee during that time, the average annual combined premium for employers and workers rose from $6,550 to $10,606.

• For family health coverage in Tennessee, the average employer’s portion of annual premiums rose 58 percent, while the average worker’s share grew by 73 percent.

Health Care for America Now - the nation's largest health care campaign - is made up of more than 1000 organizations representing more than 30 million people nationwide. President Obama and more than 190 Members of Congress support HCAN’s principles for health care reform. All across the country, HCAN supporters are organized and mobilized to stress the urgent need for health care reform in 2009 -- reform that finally puts our health care needs before insurance company profits.

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