Citizen group calls for public insurance option

During a teleconference, Wishman said continued consolidation in the private health insurance industry has meant skyrocketing premiums for both patients and employers because an insurer can raise prices or reduce the variety of plans or quality of services offered to customers without fear of market consequences.

“When just a couple of companies hold a near-monopoly, they not only set the prices, but they also make the rules and call the shots,” said ICAN executive director Betty Ahrens, who serves as a consumer advocate to the National Association of Insurance Commissioners. “It's time for real comprehensive reform that includes regulation and the choice of a public health insurance plan so we are no longer at the mercy of the private health insurers in Iowa.”

Ahrens said it is still unclear how a public health insurance plan might be financed, although participants likely would pay premiums similar to private insurance and some government subsidy would be required for low-income and high-risk coverage. She said several possible funding sources are under study in Congress and President Obama has proposed ending upper-income tax cuts started under the Bush administration as a source for financing a public health insurance option.

In Iowa, Wishman said the commercial health insurance business is dominated by a few companies, preventing new competitors from entering the market and allowing the most powerful hospitals and doctors to raise rates with minimal resistance. Freedom from genuine competition also have allowed insurers to reap sizable profits and raise premiums with impunity.

Danny Homan, president of American Federation of State, County and Municipal Employees (AFSCME) Council 61, said health insurance premiums for Iowa working families have increased 73 percent from 2000 to 2007 at the same time that those workers' median earnings increased 19 percent.