Insurance Market Stabilized Since 2017, But Antitrust Practices Still an Issue

TALLAHASSEE, Fla. (FNN NEWS) – The health insurance market has stabilized in the last few years, but legislation is needed to discourage antitrust practices in the state to avoid further price increases for individuals, as recommended during a hearing of the Finance and Facilities Subcommittee of the Florida House of Representatives.

Thomas Greaney, professor of Law at the University of California Hastings College of Law, explained that “price is the most important factor explaining high cost in the United States compared to other nations. And where the concentration of services is higher, so are the prices.”

Professor Greaney explained that these practices are a result of under-enforcement of the Antitrust Merger Law, erroneous decisions by the courts, regulatory gaps and incentives to merge, besides misinterpretation of the Affordable Care Act and “a ‘gold rush’ mentality promoting consolidation.”

“The ACA does encourage integration, but is not intended to encourage monopolies,” he cautioned.

As a consequence, according to studies cited by Greaney, insurance costs have increased between 20 and 44 percent after mergers but also translates into a poorer patient experience, reduced quality, and higher mortality rates. “When hospitals acquire physician groups, physician prices increase an average of 14 percent; cardiologist prices increase by 33.5 percent,” he explained. “When hospitals acquire clinics, prices increase between 32 to 47 percent.”

“Bigger is not necessarily better,” he added.

Other areas to watch out for are cross-market mergers, which have translated to 7-17 percent increases in prices, and 7.8 percent increases in nearby rival hospitals.

As possible solutions, Greaney recommends an improvement in merger oversight and legislative measures such as forbidding anti-competitive contractual terms and an increase in transparency.

He also proposed administrative solutions like certificates of public advantage, insurance department reviews, and enhanced power for state attorney generals.

He cited as an example the Rhode Island Affordability Law, which empowers the state department of health insurance whether to approve health plan rates based on affordability criteria, high payments to dominant providers and requires increased funding for primary care.

The law “has changed the bargaining dynamic and lowered costs. The model can be adapted to permit the insurance commissioner to reject plans with anti-competitive contract clauses, set maximum reimbursements, and require value-based payment methods.”

Under these circumstances, the Florida insurance market has stabilized in the last four years, according to John Reilly, Deputy Commissioner for the Florida Office of Insurance Regulation, in the second part of the hearing.

Small group insurance, or insurance for companies between two and fifty employees, has decreased since ACA, from 800,000 to 500,000 in 2020, while rates have increased 77 percent.

The individual market, on the other hand, has gone from 800,000 before ACA, to 1.9 million in the year 2020. And rates for individuals have increased 212.7 percent.

Reilly, however, pointed out that pricing has stabilized and that allows competition.

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Juan Carlo Rodriguez is a politics and entertainment reporter with Florida National News. | info@floridanationalnews.com