Thursday, October 24, 2013

ACA does little to manage health insurance costs in rural America

Here's an excerpt from today's front-page NYTimes story, "Health Law Fails to Keep Prices Low in Rural Areas," by Reed Abelson, Katie Thomas and Jo Craven McGinty:
Of the roughly 2,500 counties served by the federal exchanges, more than half, or 58 percent, have plans offered by just one or two insurance carriers, according to an analysis by The Times of county-level data provided by the Department of Health and Human Services. In about 530 counties, only a single insurer is participating. 
The analysis suggests that the ambitions of the Affordable Care Act to increase competition have unfolded unevenly, at least in the early going, and have not addressed many of the factors that contribute to high prices. Insurance companies are reluctant to enter challenging new markets, experts say, because medical costs are high, dominant insurers are difficult to unseat, and powerful hospital systems resist efforts to lower rates.
They quote John Holahan of the Urban Institute:
There’s nothing in the structure of the Affordable Care Act which really deals with that problem.  I think that all else being equal, premiums will clearly be higher when there’s not that competition.
The authors use Montana and Wyoming to illustrate the fact that a third competitor can make a huge difference in a given marketplace.  Montana has three companies competing to insure residents, and prices are much lower there than in Wyoming, where only two carriers are vying for customers.   

Don't miss the accompanying map.

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