By Evan Falchuk
The effort to find scheming enemies of progress continues.
Harry Reid announced yesterday that people protesting at town hall meetings were there at the behest of the “insurance rackets.”
Rackets?
There’s a lot to criticize in the health insurance industry. But any fair discussion has to recognize the important role government has played in the creation of the health insurance industry as it exists today.
Health insurance is one of the most heavily regulated industries in America. State governments limit competition in their markets by mandating what insurers must cover and how much they can charge. It’s a combination that leads to high prices, anti-competitive practices, and a market that looks like this:
- The median market share of the largest insurer in each U.S. state is about 47%
- The five largest insurers in each state control 75% or more of the market
- In 23 states, the five largest insurers control 90% of the market
And so if the government is so involved in the creation of the health insurance market as it exists today, why isn’t it also to blame for its woes?
Senator Reid ought to know better.
If the health insurance companies are a “racket” – well, their partner in this racket is the government itself.
