There is No Competition in ObamaCare Competition and enrollment are claimed to be the two fundamental factors that will keep healthcare insurance costs down on the healthcare insurance exchanges under ObamaCare. Started before the rollout, the Center of Medicare and Medicaid Services (CMS) began soliciting healthcare insurance providers, both large and small, to participate in the process of providing healthcare insurance for each state and Washington DC. With a promise (projection) from the CMS as to the number of individuals that were anticipated to enroll in the various regions of each state, those insurance providers choosing to participated on the healthcare insurance exchanges began creating “ObamaCare compliant” healthcare insurance packages that would compete with one another in each region of each state. But as has been the case with so many other key elements of ObamaCare, the Obama administrations naiveté in the real word of business and capitalism led them down a path of certain failure. The assumption (or blind arrogance) that private healthcare insurance providers were going to embrace all the wonders of ObamaCare and come flocking to CMS begging for the opportunity to participate on the healthcare insurance exchanges failed to materialize. Enticing healthcare insurance providers to participate on the federal and state run exchanges has been a daunting task as for many private insurance companies, there is too much uncertainty in highly contested law that had to be passed in the darkness of night and could not muster a single bi-partisan vote. There is also the uncertainty of enrollment numbers which means either higher rates or higher risk and in many cases both. The risk factor has driven many of the largest healthcare insurance providers away from the healthcare insurance exchanges or at least curtailed their participation leading to fewer participants i.e. less competition. Secretary of the Department of Health and Human Services Kathleen Sebelius claims that on average, there are eight (8) insurance companies participated on each state and federal run healthcare insurance exchange. This is a mythical number at best and was derived by using a weighted average based on the number of uninsured residents in a particular area as a means to boost the number and mislead people into thinking there is completion on the exchanges. Most states have far fewer than eight insurance companies competing for people business such as West Virginia and New Hampshire which only have one and many other states that have only two to four companies participating on their exchanges, Georgia has five and Hawaii is another state that has only two2. President Obama’s “go to” state of New York tops the chart with 16 companies participating on their exchange which stands to reason as New York is one in states that healthcare insurance providers find attractive due to the fact that they can offer insurance rates to New Yorkers lower than what was being offered prior to ObamaCare. Sadly, New York is one of only three or four states that fall into this category. Many consumers are also realizing that just because there are a certain number of insurance providers participating on their states healthcare exchange, this does not mean each of these providers is offering plans in their particular region. A large number of rural areas offer only one provider and rarely are the plans affordable. In order to ensure that every region in the nation was covered, the CMS had to plead with many insurance providers to offer healthcare plans in areas the providers found financially unattractive. They did so, but it came at a cost. What will have a more significant impact on healthcare insurance rates than competition is enrollment. The current rates offered on the exchanges were based on projected enrollment data provided to each healthcare insurance company by the CMS. If enrollment on the exchanges fails to produce the projected numbers, insurance providers will have no choice but to increase their rates or pull out of the marketplace all together as many have already done. Even if a greater number of insurance providers chose to participate on the exchanges it is unlikely that rates would be reduce much if at all as the problem with rates is not the lack of completion but instead the environment created by the regulations within the ObamaCare law coupled with the long standing and highly unfounded belief, from those on the left, that insurance companies have been operating on mega large margins, a fallacy we all now know is not true.
Posted on: Thu, 07 Nov 2013 17:52:19 +0000
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