N.C. Dominated By Two Insurers

News & Observer (Raleigh, NC)
May 21, 2009

May 21--In an effort to mute the argument that a national health care plan would hurt marketplace competition for insurance, a coalition of employee and civil rights groups released data Wednesday showing a near monopoly of coverage already in North Carolina.

Two companies, Blue Cross Blue Shield of North Carolina and UnitedHealth Group, control 73 percent of the state's private insurance policies. Blue Cross alone has a 53percent share. The data, compiled by the American Medical Association in a 2007 study, was issued by Health Care for America Now, a coalition that is lobbying for health care reform.

The group contends the concentration of business has contributed to a spike in the cost of health care premiums, which rose 75 percent from 2000 to 2007, compared to a 14 percent increase in personal income during the same period.

"It's shocking how little competition there is," said Pat McCoy, state director of North Carolina ACORN, a community organization that is part of the health care reform effort. McCoy said the U.S. Justice Department considers a market "highly concentrated" if one company controls more than a 42 percent share.

The market data hit a particularly raw nerve with state employees, who are covered by a BCBS of North Carolina plan that was negotiated without a bid, and has suffered massive losses that taxpayers and state workers are now paying to resolve.

Dana Cope, executive director of the State Employees Association of North Carolina, lit into Blue Cross for an ad campaign he said was hypocritical. While national health insurance groups have agreed to participate in health care reform negotiations in Washington, BCBS of North Carolina is creating ads that portray national health coverage as a danger to competition.

"Blue Cross doesn't want any competition in North Carolina," Cope said.

Lew Borman, corporate spokesman for BCBS of North Carolina, said North Carolina has more than two dozen health insurers offering coverage, creating a healthy market from which patients can select coverage.

"We support aspects of reform that rein in costs," Borman said. "We think everyone should be covered, and we strive to keep costs down for our customers."

Some patients and small business owners, however, said the current environment has provided them few affordable options for coverage.

David Benson, owner of The Third Place coffeehouse in Raleigh's Five Points neighborhood, said he cannot afford to offer health coverage for his seven or eight employees. Just buying insurance for him and his family costs $780 a month -- and they're healthy.

"That's a lot of money," Benson said.

Kay Zwan, a mother of two from Wilmington, said she was financially ruined after she lost her job and could not afford insurance for her husband and son, who have health problems that insurers refuse to cover.

"A public health care plan is not about taking away your choices, it's about restoring your choices," she said, adding that families should be able to count on getting medical care regardless of their financial circumstances.

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