Dafny: 'We are paying a premium on our premiums'

9/22/2015 - Leemore Dafny, the Herman Smith Research Professor in Hospital and Health Services, testified Sept. 22 before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights on the impact of health insurance consolidation on consumers.

Her testimony delved into the recent trend of mergers by health insurers and how that has affected premiums and other potential interests to customers. In the past, Dafny argued, a lack of competition has contributed to an increase in premiums. “We are paying a premium on our premiums because of limited competition,” she said.

Consolidation and higher health care costs are a concern many share as private insurance premiums ($16,834 for the average family) and out-of-pocket spending ($800 per person) are expected to grow. Dafny testified that premiums could rise at a rate of $200 per person annually.

And with the Affordable Care Act’s mandate requiring those without public coverage to purchase private policies, federal subsidies for those policies are expected to rise from $32 billion in 2015 to $84 billion by 2020.

“Given these stakes, there is a substantial public benefit to critically evaluating any significant changes in industry market structure,” Dafny said in a prepared statement.

Dafny’s research focuses on competition in health care markets, in particular hospitals and health insurance providers. In 2012, Dafny was appointed deputy director for health care and antitrust for the Federal Trade Commission’s Bureau of Economics, where she investigated potentially anticompetitive conduct within the health care industry. Her research on health care insurance markets was critical in developing the ACA’s public exchange system.


Watch Professor Dafny’s testimony (Starts at 50:53) or read her prepared remarks.


Related reading: