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Lanhee Chen On Competition in the Health Insurance Market


Published: August 21, 2019

The Affordable Care Act, otherwise known as Obamacare, has increased health care premiums in the individual market. Many insurers have stopped offering health insurance plans because they were losing money. As a result, competition and choice in the marketplace has fallen.

Additional Resources

  • In “Will We Ever Have a Peaceful Resolution to the Health Reform Wars?” Lanhee Chen discusses the prospects of health care reform in the United States. Available here.
  • Read “Three Obamacare Tweaks That Both Parties Can Love” by Lanhee Chen and James Capretta. Available here.
  • Lanhee Chen discusses the current state of health care reform. Available here.
View Transcript

What we’re seeing is acceleration in premiums, and this has happened over the last couple of years and it is going to continue happening as we go forward. 

Fewer and fewer insurers want to sell Obamacare compliant policies, because they lose money on it! 

Obamacare included in it large pots of essentially payoffs for insurers to participate in Obamacare, and what Republicans have said is basically, “No, we’re not going to do this anymore.” 

And so insurers have said, okay well if we’re not gonna get the money, we’re gonna have a very difficult time justifying why it is that we’re offering insurance in marketplaces where we’re going to lose money. 

So what you see here is planned competition has come way down. 

In 2018, the number of counties where there is only one insurer went from about one thousand to over sixteen hundred. 

So what do we know? Competition goes down, prices go up as well.