Creating a competitive marketplace with multiple insurance providers for consumers to choose from was an often-touted benefit of the Affordable Care Act’s insurance exchanges, but for some residents, that pool of competition is a lonely one provider.
Many insurance offerings are done by region, says Cynthia Cox from the Kaiser Family Foundation, and there are different ways to measure the number of insurers in each state. Some states, like Texas she says, have the same insurer offering individual and multi-state plans from Blue Cross Blue Shield of Texas.
“It’s the same company, but technically two insurers, but in practice they are not really competing with one another,” Cox says.
With that said, all consumers--no matter where they live or how any many insurers are participating on their state’s exchange--have four tiers of insurance plans to choose from.
More insurance carriers have left the individual market due to their own increased costs, as Kaiser Health News reported last week, and hundreds of thousands of individuals have been dropped from their current plans that aren’t legal under the ACA’s new requirements because they don’t cover certain benefits.
People living in less-populated parts of the country, including rural Alabama, coastal North Carolina and the Florida Panhandle also have only one insurer to choose coverage from, according to Cox.
“One insurer means not very much competition and those areas with one insurer seem to have higher premium prices to some degree,” she says. “Several of these states have very uncompetitive markets to begin with before the law, so we weren’t expecting that to change.”
Devon Herrick, senior analyst at the National Center for Policy Analysis, says that even if individuals have only one insurer offering plans to them, the offerings themselves range in tiered plans from bronze to platinum, depending on premiums, deductibles and offerings.
“Regulations make a lot of these insurers back up and say, ‘there is too much uncertainty, and we are not going to offer in that state or region this year,’” he says. “Look at Montana, where the capital has around 50,000 people. The problem is the size—it’s hard to underwrite such a small group of people.”
Cox says it’s possible that more insurers may enter the market in 2015, and give individuals more competitive offerings.
“We hope this may encourage more competition, but we didn’t see this happening in 2014,” she says.