WSJ: Poorer counties facing especially high premiums, few choices, little competition through ObamaCare
posted at 2:41 pm on February 13, 2014 by Erika Johnsen
“My guiding principle is, and always has been, that consumers do better when there is choice and competition. That’s how the market works. Unfortunately, in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up and quality goes down.”
So sayeth President Obama, but so far, his crowning legislative achievement has directly resulted in a whole lotta’ restrictions on consumer choice, while his brand of top-down government-led “competition,” well… isn’t, really.
On top of the narrower provider networks that many Americans are now facing as insurers scramble to control costs while complying with ObamaCare’s new rules, the WSJ just did an analysis of the healthcare offerings in 36 states that found that hundreds of thousands of Americans in poorer counties are discovering they have limited choices of health insurers and are looking at higher premiums through the online exchanges. For many, in fact, their ObamaCare-offered policy options
are going to come from a monopoly of their local insurance market:
Consumers in 515 counties, spread across 15 states, have only one insurer selling coverage through the online marketplaces, the Journal found. In more than 80% of those counties, the sole insurer is a local Blue Cross & Blue Shield plan. Residents of wealthier, more populated counties in the U.S. receive lower-priced choices than those living in counties with a single insurer. …
Higher participation rates among young adults, as much as 40%, is seen as essential to balance out the higher costs of covering older people for insurers that are already limiting the counties where they offer coverage. …
The average price for a 50-year-old American to obtain the cheapest midlevel “silver plan” through HealthCare.gov—the marketplace operated by the federal government—was $406 in counties with one health insurer, the Journal found. In counties with four insurers, the average price of the cheapest comparable silver plan was $329.
The price differences reflect the strategy of insurers to pick markets where they believe they can turn a profit—and avoid areas of high unemployment and a concentration of unhealthy residents they deem more risky.
Aetna Inc. and UnitedHealth Group Inc., for instance, have limited their participation in the new health-insurance marketplaces, where consumers shop for coverage, to a much smaller map than their traditional business. They offer coverage in more counties outside of the marketplaces, where plans are sold directly to consumers and federal subsidies aren’t available.
Aetna’s CEO Mark Bertolini has been pretty open about the fact that his company is only participating in ObamaCare in areas with stable levels of employment and income in order to attract profitable customers, although as he mentioned again last week, they’re still considering pulling out of ObamaCare altogether if they don’t feel they can maintain profitability.
So, in many cases, the number of insurers competing in many states’ individual insurance markets via ObamaCare is actually less than the number of carriers that sold individual policies pre-ObamaCare. …Winning?