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ObamaCare’s Oligopoly Wave

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Bigger insurance, bigger medicine, and a health consolidation frenzy

The five largest commercial health insurers in the U.S. have contracted merger fever, or maybe typhoid. UnitedHealth is chasing Cigna and even Aetna Humana has put itself on the block; and Anthem is trying to pair off with Cigna, which is thinking about buying Humana. If the logic of ObamaCare prevails, this exercise will conclude with all five fusing into one monster conglomerate.

“The danger is that ObamaCare is creating oligopolies, with the predictable results of higher costs, lower quality and less innovation.

This multibillion-dollar M&A boom is notable even amid the current corporate-financial deal-making binge, yet insurance is only the latest health-care industry to be swept by consolidation. The danger is that ObamaCare is creating oligopolies, with the predictable results of higher costs, lower quality and less innovation.

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“More important, the economics of ObamaCare reward scale over competition. Benefits are standardized and premiums are de facto price-controlled.”

The business case for the insurance tie-ups among the big five commercial payers, which will likely leave merely three, is straightforward. Credit is historically cheap, and the insurers have built franchises in different areas that could be complementary. As for antitrust, selling coverage to employers doesn’t overlap with, say, managing Medicaid for states. (Expect some of the Blue CrossBlue Shield nonprofits to hang for-sale signs soon for the same reasons.)

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More important, the economics of ObamaCare reward scale over competition. Benefits are standardized and premiums are de facto price-controlled. With margins compressed to commodity levels, buying more consumers via mergers is simpler than appealing to them with better products, to the extent the latter is still legal. Read the rest of this entry »

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Corporate Donor List Revealed: Who Funds the Far Left? You’ll Be Surprised

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Reminder: large corporations are not, in general, supporters of free enterprise

John Hinderaker writes: The Center for American Progress is a left-wing organization that is closely associated with the Obama administration. Its principal product is a web site called Think Progress. Think Progress is part of the internet cesspool that modern liberalism has become. Written by hack left-wing bloggers, it is bitterly hostile to free enterprise. It is a low-rent site that traffics in the most absurd smears and conspiracy theories. Many have wondered for some years who finances far-left web sites like Think Progress. As of today, we know at least part of the answer, as CAP released its corporate donor list for the first time.

CAP says that individuals and foundations account for more than 90% of its funding, and corporations only around 6%. It would be interesting to see the individual and foundation donor list; my guess is that left-wing foundations, most of which spend money left by dead conservatives, would loom large. But what corporations fund Think Progress’s anti-free enterprise propaganda? The full list is here; it includes:

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Obamacare’s Troubles are Only Beginning

Whitehouse.gov

Whitehouse.gov

Peter Suderman writes: Right now, most of the problems with Obamacare’s online insurance exchanges are with the signup process, particularly in the 36 exchanges being run by the federal government. But there are deeper, more fundamental problems looming even if the surface web-accessibility problems are largely fixed.

For example: Just because someone has completed the online enrollment process doesn’t mean that they’ve actually gotten coverage. Reports indicate that many of the applications that are making it through the system don’t actually have enough data for insurers to process the enrollee.

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Ten states where Obamacare wipes out health care plans

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Sarah Hurtubise writes: President Barack Obama famously promised, “If you like your health care plan, you can keep your health care plan.” He later got even more specific.

“If you are among the hundreds of millions of Americans who already have health insurance through your job, or Medicare, or Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have,” Obama said.

But as Obamacare’s rollout approaches, we have learned this is not true. Here are the ten states where consumers may like their health care plans, but they won’t be able to keep them.

1) California: 58,000 will lose their plans under Obamacare. The first bomb dropped in California with a mass exodus from the most populated state’s Obamacare exchange. Aetna, the country’s largest insurer, left first in July and was closely followed by UnitedHealth. Anthem Blue Cross pulled out of California’s Obamacare exchange for small businesses as well.

Fifty-four percent of Californians expect to lose their coverage, according to an August poll.

2) Missouri: Patients of the state’s largest hospital system — which spans 13 hospitals including the St. Louis Children’s Hospital — will not be covered by the largest insurer on Obamacare exchanges, Anthem BlueCross BlueShield. Anthem covers 79,000 patients in Missouri who may seek subsidies on Obamacare exchanges, but won’t be able to see any doctors in the BJC HealthCare system. Read the rest of this entry »


Worse Is the New Normal

Mid-20th-century assumptions of generational progress no longer obtain. 

frownyOMark Steyn observes: A few years ago, after the publication of my book America Alone, an exasperated reader wrote to advise me to lighten up, on the grounds that “we’re rich enough to be stupid.” That’s to say, Western democracies and their citizens are the wealthiest societies ever known, and no matter how much of our energies are wasted on pointless hyper-regulation for the business class and multigenerational welfare for the dependency class and Transgender and Colonialism Studies for our glittering youth, we can afford it, and the central fact of our wealth will ensure that our fortunes do not change. Since the collapse of Lehman Brothers in 2008, we have been less rich, and our stupidity ought in theory to be less affordable. Instead, it’s been supersized. To take only the most obvious example, President Obama has added six-and-a-half trillion bucks to the national debt, and has nothing to show for it. As Churchill would say, had his bust not been bounced from the Oval Office, never in the field of human spending has so much been owed by so many for so little. Read the rest of this entry »