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2 insurers control FL, groups say

By Christine Jordan Sexton
5/20/2009 © Health News Florida

Two health insurers in Florida control so much business that they've stifled competition and fueled health inflation in the state, according to a report released today by consumer advocates under the umbrella name Health Care for America Now. Sean Shaw, the state’s consumer advocate, is lending his support.

HCAN contends that lack of competition in the health insurance market—in Florida and nationally—has caused insurance premiums to increase and contributed to the rising number of uninsured residents. The group is lobbying for a public plan option, which it maintains will bring more competition into the market.

Just two companies-- Blue Cross and Blue Shield of Florida and Aetna Inc.—dominate 45 percent of Florida’s insurance market, the report says. The Blues, based in Jacksonville, account for 30 percent of the insured market statewide.

"When you don't have choice in the market, companies can do what they want to do," said Shaw, who said that insurance companies are "making a lot of money in this system but it's not good for the consumer."

According to the 12-page report, the market with the least competition among insurers is Pensacola, where the two leading companies account for 83 percent of the market share. 

The report also shows that there also is little competition among insurers in Naples, Fort Walton Beach, Panama City, Sarasota and Bradenton, where at least 73 percent of those insured are enrolled in one of two health insurance plans. The Orlando area had the greatest amount of competition, with the top carriers accounting for a combined 45 percent of the market there. 

In addition to Shaw, Florida HCAN  has the support of  the American Federation of State County and Municipal Employees (AFSCME), Florida Public Interest Research Group (FPIRG) and the Association of Community Organizations for Reform Now (ACORN), a community organization of low and moderate-income families. Health Care for America, is a campaign of 850 organizations working to promote President Barack Obama’s health reform initiatives.

The lack of competition among insurers, the report indicates, is why health insurance premiums in Florida increased 72 percent between 2000 and 2007 while individual wages grew only 20 percent. Citing information compiled by Families USA, the report notes that employees shouldered the majority—or 94 percent-- of the premium increases during that seven-year period.

United Healthcare spokesperson Roger Rollman said rising health care costs, not market dominance, are the primary driver of premium increases.  "As far as we are concerned," Rollman said of the report, "we think it's nonsense."
In Florida five companies withdrew from the market between 2004 and 2007, according to an analysis of Florida's health insurance market published by the Florida Health Insurance Advisory Board. The report, published last October, shows there were 118 companies writing major medical in 2007, but most had relatively little business. 

Reforming the health care system is a priority of the President and Congress. Obama has supported a publicly sponsored health option as part of his solution to providing coverage to the 45 million people who lack health insurance. 

In Florida, 24.4 percent -- almost one in four -- of those under Medicare age were uninsured in 2006-07, according to the Kaiser Family Foundation. That rate was significantly higher than the national average of 18 percent, and most analysts say the rates have likely climbed because of the recession.
Nationally, the number of health insurers in the market has diminished, with the report noting that in the past 13 years there have been more than 400 corporate mergers involving health insurance companies.

The lack of competition has been good for the companies’ bottom lines. The report indicates that profits at 10 of the country’s largest publicly traded health insurance companies in 2007 rose 428 percent from 2000 to 2007, from $2.4 billion to $12.9 billion, according to US Securities and Exchange Commission filings.

The report is a compilation of a number of analyses conducted by Families USA, the American Medical Association, US Department of Justice and the Government Accountability Office, among others. 

--Christine Jordan Sexton can be reached at