Sarah Kliff talks to experts about the competitiveness between health insurers on Obamacare’s exchanges:
“I would characterize it as modest plan competition,” Caroline Pearson, vice president for health reform at Avalere Helath, said. “In most markets, there seems to be a bit more choice than what’s available in the market today. But we’re certainly not seeing a wild influx of plans into the market.”
Cohn claims that more insurers in isn’t neccesarily better:
[T]here’s such a thing as too much choice in health insurance. And it actually shouldn’t take more than a few plans to foster serious competition, particularly given all the other changes Obamacare is making. “It’s important not to lose sight of the obvious stuff,” says Larry Levitt, a senior vice president at the Kaiser Family Foundation. “This market will become much more competitive just because people will be able to compare prices (which they can’t now because of medical underwriting) and be guaranteed access.”
Yglesias explains why too much competitiveness in the exchanges could be bad:
With a lot of insurers in the field, what essentially happens is that market power shifts to the hospitals and other providers. Insurers need to “compete” to gain access to key providers, so providers can charge high prices that insurers then largely pass along to customers as high premiums. It seems to me that the optimal situation is to have a few insurers in the exchange so that competition plus Medical Loss Ratio regulations keep premiums reasonable, while ensuring that the insurers retain market power vis-à-vis providers and thus can act as bulk purchasing agents on behalf of patients. But how many is “a few”? Three? Four? I don’t know. But as states set exchanges up, this is something to think about.
The Dish 