Dive Brief:
- Consumers living in rural areas and small towns are facing higher premiums on federal government insurance marketplaces, largely because there's little health plan competition in their region. For example, in rural Baker County, Ga., where there's just one insurer, a 50-year-old buying a silver plan would pay $644.05 per month. That's double the cost for a similar plan in Atlanta, which is served by four insurers.
- Of approximately 2,500 counties served by federal health exchanges, nearly 60 percent have access to policies written by only one or two insurance carriers, according to an analysis by The New York Times. In about 530 counties, only one insurer is offering products through the exchange.
- The entry of a third player -- either a commercial or a co-op plan -- seems to create downward pressure on prices. But many insurers are holding back and waiting to see how the marketplaces form up during 2014. "We don't view 2014 as the make-or-break year," an insurance executive told the Times.
Dive Insight:
What we're seeing here -- the control of insurance markets by one or two carriers -- has been an issue for many years. Occasionally state regulators will slap down a health plan merger, but in most markets, a few health plans have a lock on major state and regional markets. Provider interest groups, notably the American Medical Association, have fought health plan consolidation tooth and nail, but they haven't been very successful. Given this state of affairs, artificially creating competition by establishing co-ops is likely to be a necessary step in making the ACA work.