Nailing These Big Insurance Bastards Would Make Up for a Lot

I am so old I remember when Blue Cross and Blue Shield were - you better sit down - non-profit insurance companies.

One of them covered doctors and prescriptions and the other covered hospital care. They merged and turned into a for-profit HMO during the Reagan crusade to corporatize America.

Before Reagan, HMOs were weird little experiments, trying to bring down healthcare costs by covering preventive care and encouraging healthy habits.

After Reagan, HMOs were Giant Rapacious Monsters, making profits not by encouraging good health but by denying payments to anyone stupid enough to actually get sick or injured.

They've been getting worse every year since. It does not surprise me to learn that Blue Cross/Blue Shield finally crossed the line from behavior that should be illegal to behavior that actually is illegal.

The surprising part is that the Obama Justice Department may actually prosecute the bastards for it.

Susie Madrak at Crooks and Liars:

If Eric Holder ends up indicting and convicting the Blues, I'll take back every snide comment I ever made about the Department of Justice:

The U.S. Justice Department is widening a probe into whether Blue Cross Blue Shield health-insurance plans are artificially raising premiums in several states by striking agreements with hospitals that stifle competition from rival insurers.

Federal investigators and some state attorneys general have sent civil subpoenas to "Blue" health plans in Missouri, Ohio, Kansas, West Virginia, North Carolina, South Carolina and the District of Columbia, according to people familiar with the matter.

The investigation is examining whether dominant health plans around the country are forcing hospitals to sign anticompetitive contracts that unlawfully inhibit them from doing business with their rivals.

The Justice Department's investigation comes as the Obama administration seeks to rein-in rising health-care expenses that threaten to drive up the government's costs for expanding care under President Barack Obama's health-care plan. Congressional Republicans and others have said the Affordable Care Act, Mr. Obama's signature domestic policy achievement, won't lead to lower insurance premiums. Showing that the administration can counter rising premiums by encouraging greater competition could help win support for the law from a skeptical public.

The contractual provisions under scrutiny are known as "most-favored nation" clauses. They usually stipulate that hospitals must charge the insurers' competitors equal or higher prices for medical services.

Such clauses aren't in themselves illegal—they can simply be guarantees to get the best pricing available. But they can violate antitrust laws if used improperly by a dominant company to hobble competitors.

Blue plans tend to be state- or regionally-based and therefore have the market clout to strike such deals with hospitals. While national plans such as UnitedHealth Group Inc. and Aetna Inc. tend to be larger, they are more spread out and typically lack the concentration of a Blue plan in a given local market.

A Justice Department spokeswoman said: "The antitrust division is investigating the possibility of anticompetitive practices involving MFN clauses in various parts of the country."

These insurance contracts are written with all kinds of unfair and non-competitive restrictions. Did you know that when doctors sign an agreement with an insurance company to accept their users, they also agree that they won't offer lower prices to patients who don't have insurance? So even if your doctor wants to cut you a break, he can't.

Imagine, just for a minute, that your insurance company were motivated not by squeezing every last dime of profit out of you but by giving you financial incentives to get and stay as healthy as possible.

It actually does happen, right here in America: At the socialist-medicine success of the Veterans Affairs health care system. For millions of seniors who rely on the single-payer Medicare system. And soon for every resident of the Great State of Vermont, whose legislators have just approved a single-payer system.

Have you talked to your Democratic neighbors today?