Mr. President, after decades of efforts and a year of extensive debate, Americans will finally have a health care system that controls costs, reduces the deficit, improves access, adds more protections for seniors and curbs insurance…
Mr. President, after decades of efforts and a year of extensive debate, Americans will finally have a health care system that controls costs, reduces the deficit, improves access, adds more protections for seniors and curbs insurance company abuses. The President has signed meaningful health care reform into law that will extend immediate benefits to millions of American families and small businesses.
In implementing this comprehensive legislation, the Department of Health and Human Services will be called upon, as will other Federal agencies, and the States, to make assessments in a variety of contexts as to whether the marketplace is functioning properly, or whether abuses are occurring. In making these assessments, and in deciding on appropriate steps to address any abuses or dysfunction, the Federal agencies and the States can benefit greatly from competitive analysis provided by the Department of Justice's Antitrust Division and the Federal Trade Commission.
One example where this advice would be particularly beneficial is in implementing the mandate to establish State and/or regional health exchanges. At present, many State health insurance markets are characterized by their extreme concentration. According to the American Medical Association, in 2007, at least one insurer had a combined HMO/ PPO market share of 50 percent or greater in 64 percent (200) of the local markets (or Metropolitan Statistical Areas) of the United States. And the two top insurers accounted for at least 60 percent of enrollment in almost 75 percent of these markets. High concentration and barriers to entry reduce price competition and customer choice.
The law just passed contains an antitrust savings clause, which clarifies that Congress did not intend health care reform to erode the reach of the antitrust laws in any way. To restore true competition however, more than a savings clause is needed.
I am pleased that the law vests in State exchange regulators the power to address competition failures in the market, including the root causes of industry concentration. This means curbing anticompetitive practices designed to keep prices high and choices low, and also encouraging new market participants by mitigating barriers to entry. Obvious market abuses, such as tying agreements, predatory practices and the like, must be stopped. But success also requires that the regulators get the more delicate issues right: does a preferred rate agreement constitute a de facto boycott? Will a regulation or exchange adversely impact the ability of a new participant to gain public trust? How does a proposed rule impact the ability of young insurance companies to develop a comprehensive network of health care providers?
These are difficult questions and we should not expect State regulators to develop an expertise in them overnight. But our Federal antitrust agencies, have, through years of experience, developed just this expertise. I urge the exchange regulators, as well as the Department of Health and Human Services and other responsible agencies, to make full use of their assistance.