Experts: A lack of competition could hurt the ACA exchanges

Some states will keep 'virtual [insurance] monopolies,' one expert says

Topics: Health Policy, Market Trends, Strategy, Finance

April 25, 2013

The Affordable Care Act's (ACA) health insurance exchanges aim to provide more affordable coverage through competition—but experts say they are concerned the exchanges will be hindered by a lack of choices.  

  • Need a refresher on the state health exchanges? We've got you covered with a quick review of the ACA marketplaces, including when they're rolling out, how they work, and what it means for you.

Linda Blumberg of the Urban Institute said that there "are still going to be states with virtual [insurance] monopolies" after the exchanges are launched, particularly in states—such as Alabama, South Carolina, and Wyoming—where the insurance market currently is dominated by a single insurer. According to a recent American Medical Association analysis, a single insurance company held at least 50% of the market in almost 70% of local markets nationwide.

Cheryl Smith—a health exchange consultant—pointed out that the schedule to implement the exchanges also might stifle competition. She noted that the "health plans don't actually have a lot of time to get product on the shelf. If you don't have product on the shelf, where's the competition?" (Vestal, Stateline/Kaiser Health News, 4/23).

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