In the past few days, 114,000 Michigan households have received bad-news letters from Blue Cross Blue Shield of Michigan, socking individual health insurance subscribers with premium increases averaging 22%, effective Oct. [Political Carnival]
Public option anyone?
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…Given this recent occurence, their monopolistic practices and status are of particular concern.
Michigan Office of Financial and Insurance Regulation,
I would like to address the pending purchase of Physicians Health Plan by Blue Cross Blue Shield of Michigan. I would urge extreme caution in the consideration of increasing the market share BCBS already controls and the effects on competition by approving the sale of PHP, thus increasing this market share to 81.6%, a virtual monopoly. Increasing competition is understood to be good because of its effects of lowering costs and increasing quality. Also, I would question whether the sale is in violation of Michigan’s Anti-trust laws due to the above concerns.
Stats: BCBS currently controls 80.3% of private insurance market, post sale it would control 81.6%. This is a small change, but I would argue, a change in the wrong direction for competition and cost and quality concerns for the consumer.
Total pop:9.97 million
Medicaid/care: 3.02 million
Uninsured: 790,000 (.79 million)
Privately Insured: 6.16 million
BCBS: 4.95 million
PHP: 80,000 (0.08 million)
4.95 (BCBS) divided by 6.16 (Private insurance market) = 80.3%
5.03 (post sale BCBS) divided by 6.16 (Private insurance market) = 81.6%
Sincerely,
Danielle Nelson
Your local stay-at-home economist
Thank you Danielle for your analysis of the matter and sharing it with us all.