Sally C. PipesOpen enrollment in Obamacare’s exchanges is near its end. Consumers have until Jan. 16 to purchase coverage that will take effect in February.
The federal government appears to think that Americans are not equipped to pick a suitable plan. So it’s limiting the number that insurers can offer. According to the Centers for Medicare and Medicaid Services, this is an effort to “reduce the risk of plan choice overload, and to further facilitate the plan selection process for consumers.”
It’s a good reminder of how bureaucrats think about health care – that they know what’s best for each and every American. And it offers a preview of what many Democrats actually want – a system where there’s only one, government-run insurance choice.
Just a few years ago, Obamacare’s defenders were desperate for insurers to offer the very plans they are now capping. In 2016, exchange enrollees in 1,000 counties had just one insurer to choose from. Between 2016 and 2017, 28% of returning exchange enrollees saw their insurer leave the individual market. For a spell in 2017, there was worry that 45 counties would not have a single insurer participating in the exchanges.
Insurer participation in the individual market has since returned to pre-Obamacare levels. But now, according to CMS, “this increased rate of plan proliferation” makes it more likely that enrollees could choose a “suboptimal plan,” which could leave them on the hook for unexpected healthcare costs.
Curiously, this is the same argument Obamacare’s advocates use to denigrate affordable alternatives to exchange plans. Democrats claim that short-term plans – which are exempt from many of Obamacare’s strictures, including its mandate that they cover 10 “essential health benefits” – draw people in with affordable premiums but saddle them with significant out-of-pocket costs.
Research has shown repeatedly that this is not true – and that short-term plans in many cases offer more generous coverage than exchange plans for the same premium.
But if we follow this argument, the case for limiting choices on the exchanges begins to collapse. How could an Obamacare-compliant plan be “suboptimal” if it covers all 10 essential health benefits, is eligible for federal premium subsidies, and caps out-of-pocket spending in line with federal law?
And if an Obamacare plan can be suboptimal, why not let patients purchase alternative coverage?
The reasoning simply does not hold up. But that’s par for the course with government-run healthcare programs. Bureaucrats are always looking to centralize healthcare systems.
They forget that prices tend to fall when supply goes up – when consumers have more choices to pit against one another. To wit: one study of insurers between 2014 and 2015 found that a net increase of one insurer in a county was associated with a 3.5% decline in benchmark exchange premiums. A 2017 study published in JAMA Internal Medicine found that premium growth was negatively correlated with the number of insurers in a market.
Progressive Democrats respond that a truly centralized health insurance system, with just one payer, could deliver even lower costs than a competitive market, since it could dictate prices to providers, drug makers, and the like.
That’s true, in a sense. But the consequences for patients are dire.
Look at what’s happened in Canada, where people have just one choice of insurer – namely, the government. In 2022, Canadian patients faced a median wait of 27 weeks to receive care from a specialist after being referred by a general practitioner. Our neighbors to the north frequently can’t access new drugs because their government simply refuses to pay for them.
No matter the intention, government consolidation inevitably begets more government consolidation. Limiting the number of choices available on Obamacare’s exchanges may seem relatively benign. But it’s indicative of a policy outlook that will, if left unchecked, put the United States on the road to single-payer health care.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on X, formerly known as Twitter, @sallypipes.
Bob Maistros
There was a time when not even the DENSEST Americans could be convinced that having FEWER options is better. Now, half the country jumps at the chance to be deceived by a blatant lie…as long as the Left gives them permission to feel virtuous.
And promises them lots of free stuff if they agree.
The federal government has no authority to run healthcare for Americans. The healthcare businesses they have managed to take over (VA, Medicare, Medicaid) are miserably inefficient and overly expensive and invite billions of dollars in fraud. Why would we ever want more of this?
Back in the late 70s, when the wife and I were graduate students, I realized (when our daughter was born) that AS A RESPONSIBLE PARENT!, I/we needed health insurance. Even though we were both working on our graduate degrees at the time, we both got jobs that had health insurance as a benefit. In those days it didnt matter what doctor you went to, YOU WERE COVERED!! Now, between lawyers going for the “deep pockets” to enrich themselves, obama care, and the ama screwing things up for their own personal gain; healthcare is a mess. This has been done intentionally in order that the marxist a–holes(democrat party and rinos) can further their own WORTHLESS CAREERS at the expense of everybody else.
Our founders did not give the federal government the enumerated power of control over the healthcare system. LENIN INDICATED THAT CONTROL OF HEALTHCARE WOULD GIVE HIM CONTROL OVER THE PEOPLE(USEFUL IDIOTS!!!!) IN ADDITION TO CONTROL OF THE EDUCATION SYSTEM.