Could Competition Fix Small Business Health Insurance Woes?
Posted by: John Tozzi on July 22 There’s a crucial point for small businesses in a story up today by BW’s Cathy Arnst about competition in the health insurance market: [The Government Accountability Office] found that, for small group coverage, the largest insurer in a state has on average 43% of the market, up from 33% in 2002. In nine states the largest carrier has more than 50% of the market. “There is obviously a need for more competition in this market,” says Karen Davis, president of the nonprofit Commonwealth Fund, which does research on health-care issues. The industry itself doesn’t see it that way. Insurers argue that, with some 1,300 companies in the business, it can be cutthroat. “It doesn’t feel like the market is not competitive to us,” says Bradley Fluegel, chief strategy officer for WellPoint (WLP), the nation’s largest insurer. The benefits of healthy competition, however, are hard to spot. Between 2000 and 2007, annual increases in premiums averaged around 9%, while h
