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Why do individuals pay slightly more for health coverage in NC under the ACA? Lack of competition

Today reports point out that individuals who don’t get their health insurance through their work and who buy coverage in the NC health marketplace set up by the Affordable Care Act will pay – on average – slightly more for that coverage than the national average.  Unfortunately, there’s little analysis about why this is the case. [See my post from yesterday to see that despite this, with subsidies premiums for many will be under $100 a month in the new health marketplace.]

One major reason for the slightly higher prices is directly attributable to the NC General Assembly and Governor Pat McCrory’s decision this year to decline for North Carolina any role in running the new NC health marketplace under the ACA. Because of that decision, the NC Department of Insurance – the regulator most familiar to health insurers operating in our state – has no role in the operation of our health marketplace. As a result, insurers are much warier about joining the marketplace and offering plans. At this point, NC has only two insurers offering plans in the NC federal marketplace: NC Blue Cross and Coventry Health Plans.

Recently the Kaiser Family Foundation released a report about health premium costs across states. The report included a chart listing the states studied and the number of insurers in each state’s new health marketplace. States who either set up their own health marketplaces under the ACA or have heavy involvement in selecting plans or running the marketplaces have many more plans than states that have ceded the responsibility for running the marketplace to the federal government.

 States in bold either run their own health marketplaces or have significant state involvement in the marketplace:

State Number of Insurers
CA 12
CO 10
CT 3
DC 4
IN 4
MD 6
ME 2
MT 3
NE 4
NM 5
NY 16
OH 12
OR 11
RI 2
SD 3
VA 9
VT 2
WA 4*

So, other than tiny states like Rhode Island the Vermont, all states that have some significant involvement in running the health marketplaces in their states have much higher involvement of health plans in their states. The decision by McCrory and the NC General Assembly to let the federal government run the health marketplace in NC was one that will cost many of our state residents more money as they buy health plans. It was shortsighted, but can be changed next year.

7 Comments

  1. LayintheSmakDown

    September 26, 2013 at 1:13 pm

    At this point, the insurance companies and NCGA have it right. They are wary of getting involved with a scheme that is going to blow up in their face. The whole point of Obamacare is to actually decrease competition so that the federal government can take over healthcare for cradle to grave control over their subject’s health. Why would a sane company get in bed with something that is meant to destroy and dismantle their company in the long term? My prediction is you will see those in bold go to ever decreasing numbers over the next few years. Maybe you can do a follow up to this post in twelve month intervals to see the trend.

    It is also funny to see you guys (TM) advocating for competition and the free market in this case when every fiber of your being is usually spent arguing that the free market and capitalism does not work. One more instance of the scientific law of the Ignorance Of Liberalism

  2. LayintheSmakDown

    September 26, 2013 at 1:24 pm

    And your headline of “slightly” more for health coverage under ACA is misleading at best. NC is solidly in the red with EXTREME increases in every category. Just look at the states like SC and TN near us that have taken a similar track. SC for example only has 4 insurerers, and TN is on the exact exchange we are on, so there is actaully something very shady going on for us to have hundreds of percent increases while others are in line with the states that have toed the Obamacare line.

    My guess…it is a political ploy to give the leftards something to whine about. You know evicerate and destroy per Blueprint talking points.

    TN here, you can look up SC on same site
    http://insuranceexchangehq.com/tennessee-health-insurance-exchange/

    http://www.forbes.com/sites/theapothecary/2013/09/25/double-down-obamacare-will-increase-avg-individual-market-insurance-premiums-by-99-for-men-62-for-women/

  3. Alan

    September 26, 2013 at 4:04 pm

    LSD,

    Sorry, but you lose any credibility when you use statements like “the scientific law of the Ignorance Of Liberalism”. Like I have pointed out to you many times already, that’s just plain tin-foil hat wearing, foaming at the mouth, right wing crazy talk. Add to this your apparently increasing paranoia about government takeover, and you’re quickly devolving into a troll equivalent of World Net Daily.

  4. Doug Gibson

    September 26, 2013 at 8:33 pm

    LSD,

    I think policy should favor free markets where possible. But I’m not clear what that has to do with capitalism.

  5. Single Payer Action

    September 27, 2013 at 5:35 am

  6. david esmay

    September 27, 2013 at 6:14 am

    LSD laying down the neo-con ideal that anyone who gets sick should go bankrupt in order to support insurance companies and big pharma.

  7. Alex

    September 27, 2013 at 6:59 am

    Adam, this is certainly nothing new in North Carolina. Blue Cross and Blue Shield has enjoyed a cozy relationship for years with prior Democratic administrations, and has always had many unfair advantages over other health insurance companies. Over the years, they have essentially run these other companies out of the state leaving very little competition for the health insurance dollar in NC.