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Wednesday, May 21, 2014

Study: If More Insurers Join Healthcare Exchanges, Healthcare Costs Will Come Down


Obamacare puts an end of rugged individualism.
The Affordable Care Act is already working better than the status quo ante
and will continue to improve.

With Obamacare, the fundaments of American politics have undergone a categorical change
and will never be the same again.

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"Where's The Train Wreck?"

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How much would lower competition cut premiums? One study says a lot. "That's the conclusion of a new report from economists Leemore Dafny, Christopher Ody and Obamacare architect Jonathan Gruber. If every insurer that had sold individual policies in 2011 participated in Affordable Care Act insurance marketplaces this past year, average premiums for a benchmark exchange health plan would have been 11.1 percent lower in 2014, the economists found. Big insurance companies generally took a cautious approach to the new exchanges in 2014....If this new research...is correct, then more insurers entering the exchanges in future years could serve as a check on rate increases." Jason Millman.

Ask for more insurers and you shall receive -- in many places. "In Washington state, four insurers plan to sell for the first time on the exchange next year, including UnitedHealth. In Virginia, a local health plan owned by a hospital and physicians in Lynchburg has proposed to join Aetna Inc., Kaiser Permanente and WellPoint Inc. in 2015. And in Indiana, the health exchange's offerings may double to eight companies. While the three states offer the first glimpse of a movement by insurers to embrace the exchanges, the heightened competition may not be enjoyed everywhere." Alex Wayne in Bloomberg.

Background reading: Another report found fears of skyrocketing premiums mostly unfounded. Robert Wood Johnson Foundation.

Not all the big premium-increase proposals you hear about will survive. "Next year, the CBO expects the average price for a benchmark plan to increase by $100, but rates will vary by state and the geographic regions within them. In Arizona, Indiana, Virginia and Washington state, insurers have already submitted rate proposals, with most seeking premium hikes....Most states won't finalize their rates until later this summer and early fall after a series of negotiations with insurers. The Affordable Care Act requires that state insurance commissioners or the federal government review rate increases of more than 10 percent in the individual and small group market." Tony Pugh in McClatchy Newspapers.

Other health care reads:
How big a factor will Obamacare be in the midterm elections? Scott Horsley in NPR.



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