Race To The Bottom: Competition In The Exchanges
November 2, 2015
News Article
The news isn’t good for the ObamaCare exchanges. For the coming year expect higher premiums, higher deductibles, narrower networks and an overall market that has stopped growing. That last fact is the most alarming. Since January, 1.3 million people have dropped out of the exchanges. If the only ones who remain are the old and the sick, the prospect of a death spiral looms larger.
Don’t blame the insurers. They are doing the best they can, given the incentives created by Obamacare rules and regulations. President Obama promised a new health insurance market place—one in which health insurers would no longer discriminate against chronic patients with pre-existing conditions. What we have is worse discrimination than we had before.
At the time of enrollment, insurers face perverse incentives to attract the healthy and avoid the sick. The conventional wisdom in the industry is that healthy people buy on price. Only the sick spend time looking to see what doctors and facilities are in the health plan’s network. Only the sick pay close attention to copays and deductibles—especially for medications for chronic conditions.
