Let’s talk for a minute about health-care insurance and monopolies:
Insurance companies have been in the news lately, since the reprehensible gunning down of the United Healthcare CEO in New York. That unfortunate event has prompted a discussion.
Federal antitrust law is designed to increase competition in general and prevent monopolies in particular industries and markets because monopolies lead to higher prices and poorer service.
Think of Andrew Carnegie’s US Steel and President Teddy Roosevelt’s “trustbusters” who broke up consolidating and conspiring steel manufacturers.
For strange historic reasons, only two businesses remain exempt from federal antitrust laws. One is Major League Baseball, because of an idiosyncratic U.S. Supreme Court decision in the 1920s. As a result, owners of Major League Baseball teams can conspire all they want to limit expansion to other cities, to the detriment of players and fans.
The second? The insurance industry — especially health insurance companies — because in theory (but not practice as we will see), they are regulated by the states. In fact, most states have handed health insurance companies a monopoly. As an extreme example, the state of Alabama has only one insurance company.
In Illinois, we have an 800-pound gorilla called Illinois Blue Cross Blue Shield. It has the majority of insureds in Chicagoland, and the majority of Illinois Affordable Care Act policyholders. As a monopolist, Illinois Blue Cross acts exactly the way you would expect a monopolist to act. Premiums are higher and policy coverage is more limited.
By midnight Dec. 15, those of us with health care coverage under the Affordable Care Act had to commit to an insurer for 2025.
Here is one little example that is affecting me: I have a complex and relatively rare medical issue and so I receive care at the Cleveland Clinic in Ohio. I signed up for my Illinois Blue Cross Affordable Care Act policy early after making sure my providers in Cleveland were covered. But on the afternoon of December 14, my friendly Oak Park postal employee delivered to me a letter from Illinois Blue Cross dated Dec. 8.
That letter stated, under the policy I had already signed, any out-of-state treatment, including at Cleveland Clinic, would be excluded from coverage, effective January 1, 2025.
You might ask, how can an Illinois insurer in good faith send a notice eliminating coverage that arrives on the afternoon of the last day that it’s possible to change insurers?
Because that’s what monopolists do.
You can’t expect an 800-pound gorilla to act rationally when bananas are around. And you can expect an Illinois health-care insurer to behave badly when it can reduce coverage.
One solution? One that would strike fear in any partially blocked arteries of health-care insurance executives at Illinois Blue Cross/Blue Shield?
Remove the exemption from federal antitrust laws for health insurance companies and let them compete fairly like any other business.
Jack Crowe worked with Cristo Rey Network, Year Up Chicago and the Oak Park Family Transitional Shelter.