7 Years, 428 Percent Profits

This week, Steph continues her series on a critical piece of social infrastructure necessary for growing the small-scale farming sector, or any other part of a more localized economy that depends on small businesses: making a public healthcare option available to everyone.

Farmers and ranchers know all too well about the problems that occur when a marketplace has too few competitors. When corporations consolidate, the resulting bigger business squeezes out the smaller businesses that compete against it. With less competition, there is nothing stopping the consolidated business from later raising retail prices for consumers or, in the case of farmers, lowering the price paid to farmers for livestock or grain.

A lack of competition is a problem for a functioning market, regardless of whether you're buying grain, livestock, thing-a-ma-jigs or ... health care (pdf).

With health insurance costs rising much higher than wages, Health Care for America Now! began a study to see whether lack of competition could be one of the reasons. They found that in the past 13 years, there have been more than 400 corporate mergers involving health insurers. These days a small number of companies dominate local markets, but the promises of increased efficiencies and lowered costs have not materialized.

The most staggering statistic for me was that from 2000 to 2007, profits at the top 10 publicly traded health insurance companies rose 428%. Talk about beating the stock market...

This lack of competition is especially bad for small non-profit organizations or people who are self-employed or own small businesses. In a consolidated market, an insurance company can set prices as high as they want, and small groups or individuals don't have the ability to purchase policies "in bulk", so it's like they're paying retail for something larger businesses and organizations can buy wholesale.

Small businesses, entrepreneurs and self-employed workers are the lifeblood of rural communities. Without health reform that works for them, the economies of our rural communities will continue to suffer. Yet our rural states are some of the most consolidated in the country.

In Vermont (pdf) for example, where 62% of the population lives in rural communities, two companies control 90% of the market share of health insurance. Montana's (pdf) rural population is 46% of its total population, and one insurance company has 75% of the market. Iowa (pdf) has 1.1 million people in rural areas, and 80% of the insurance market is controlled by the top 2 insurers.

Of the list of top 10 most consolidated health insurance states, only two - Hawaii and Rhode Island - have a rural population of less than 30% of their total population.

So who needs competition? Clearly it helps us all, but rural states look to be especially hurt by the consolidation of the health insurance industry. The next question must then be: What will you do about it?

Here's something to do: Urge your Senators to stand up for rural voters in your state. If you live in Nebraska, Iowa, Montana, or western Wisconsin click on your state to see where to send a letter. If you don't live in one of those states, click here to find your members of Congress and be sure to send to their offices in your state to avoid security delays. When you write, consider including the following talking points:

• Health care coverage must be affordable, accessible, and available to everyone
• A public plan option - one that consumers can choose if they want to - is necessary to guarantee competition among insurers
• Reform that includes meaningful options for small business and the self-employed will bolster entrepreneurship
• Talk about your own experience with health care, or the importance of health care reform to your community

It's the role of government to protect citizens from abuse by big corporations. It's time we raise our voices and demand equality in health care.

Update: Over at DailyKos, McJoan writes about growing support for a public option in Montana, where the government describes the healthcare market as 'highly concentrated.' - Natasha