Think Fewer Insurers is Bad? Wait Until We Have Just One.

One of the biggest problems with American health care has been the fragmentation of our health insurance market. Long before Obamacare, it was already difficult to sell insurance across state lines because of state-based insurance regulations that often had specific coverage requirements. Regulations governing what must be covered can add to the cost of coverage and compliance and thus make it difficult for an insurer to justify entering a state’s health care market.

 

More insurers offering more insurance products would be good for consumers. Unfortunately, we’re getting less and less of that today. And like millions of other Americans across the country, Missourians shopping in Obamacare’s insurance “marketplace” have realized over the last few months that their options in 2017 will once again be more limited than before. In April, we found out that United Healthcare would no longer be offering many of its insurance products to Missourians, including products sold in the government market. In August, we learned that Aetna, by way of subsidiary Coventry, would be exiting as well.

 

It is the largest insurer of individuals in Missouri, holding a 38 percent market share. It’s not clear what part of Aetna’s individual business in the Show-Me state is based on exchange-based individual plans versus plans off the exchange, primarily through brokers. Aetna declined to provide that information.

 

Retreating from that customer base is confusing to some policy experts.

 

“Overall, I think you’re giving up a lot of customers. It doesn’t seem to compute,” Meuse said.

 

Aetna, however, says it needs to reduce its participation on exchanges to stem losses. The insurer earlier this month said it expects to lose $300 million this year from individual coverage it sells on the exchanges, or triple what it lost last year. Earlier this year, Aetna had said it hoped to break even in 2016.

 

Supporters of Obamacare are already trying to use the failure of their own creation as a justification to move to a single-payer, government-centric health care system—to effectively go from not enough insurers to one, with that “one” being the government. In the context of what we already know about insurance market fragmentation and reduced choice, reducing insurance choices to effectively no choice makes, appropriately, zero sense.

 

We need more competition, not less, and that means allowing for more insurance competition across state lines and focusing on bottom-up patient-focused reforms, not top-down government-centric approaches to health care policy.