Joining employers across Maryland who are feeling another year of health-insurance pain, Groove Commerce will see its medical premiums rise 20 percent on Sept. 1.
The 10-person online marketing firm is less than three years old. CEO Ethan Giffin is trying to build the business in the worst recession in decades. A key cost that goes up 13 times the rate of core inflation isn't exactly helping.
"I want to operate a company that provides for its employees and has great benefits and makes people feel welcome and a part of something," Giffin says. "What if it goes up another 20 percent next year? I have to start looking at alternatives and see how that fits."
There, in a nutshell, is the toughest part of the health care problem - wacko, out-of-control expenses.
Legislation in Washington would address the other part - millions of uninsured people - with taxpayer-subsidized coverage. Too bad it looks like Democrats are bailing on another feature that might help solve the first problem - keeping costs down with the so-called "public option" that would inject health-insurance competition into a market that badly lacks it.
What backers of "free-market" health coverage don't tell you is that there really isn't much of a market. A few huge insurers dominate most states, according to a recent report by Health Care for America Now, a pro-reform group. Employers and other buyers have hardly any choice.
Look at Maryland. CareFirst BlueCross BlueShield owns half the business, and UnitedHealth Group has another 20 percent, according to a 2007 study by the American Medical Association.
It's worse in metro Baltimore, where CareFirst and UnitedHealth control nearly 80 percent of the trade.
That's not a market. That's oligopoly - market failure. Antitrust regulators start getting worried when one company starts controlling even 40 percent of an industry.
A public health care option would provide another piece of what the market has withheld: competition. In addition to requiring almost everybody to obtain coverage, penalizing employers not offering coverage and subsidizing premiums for low-income folks, many Democrats favor creation of a new, government plan to keep corporate insurers "honest."
The public plan would be an alternative insurance choice as well as a formidable buyer of health services that could bargain with hospitals and pharmaceutical companies to lower costs. It wouldn't be perfect, and there are risks.
