[Centrist in quotes because on the issue of health care, they are substantially to the right of the population]
http://krugman.blogs.nytimes.com/2009/06/22/competition-redefined/
Paul Krugman - New York Times Blog
June 22, 2009, 9:09 am
Competition, redefined
Great catch by Digby, who quotes Sen. Blanche Lincoln about how
terrible it would be if a government-run insurance plan undermined
free-market competition, then links to this:
<quote>
The Justice Department considers an industry to be "highly
concentrated" if one company has 42 percent of the market. In Arkansas
-- Senator Lincoln should take note -- Blue Cross Blue Shield has 75
percent of the market. If you take government self-insurance plans out
of the equation, it's higher. The state ranks as the ninth most
concentrated in the country. Is it any wonder that insurance premiums
have risen five times as fast as wages?
<unquote>
The truth is that the notion of beneficial competition in the insurance
industry is all wrong in the first place: insurers mainly compete by
engaging in "risk selection" -- that is, the most successful companies
are those that do the best job of denying coverage to those who need it
most. But in any case, Arkansas is in effect a one-insurer monopoly
state, with no competition at all -- unless a public plan is created.
In fact, I may have a new hypothesis about the political economy of the
health care fight. One thing that's obvious, if you look at the balking
Democrats I chided in today's column, is that almost all of them come
from states with small population. These are also, by and large, states
in which one or at most two private insurers dominate the market.
So here's a suggestion: while the opponents of a private plan say that
they're trying to defend market competition, what they're actually
doing is defending lucrative local monopolies.