You can read this news item for yourself. Pay particular attention to the paragraph I placed in bold. The idea that “competition” will save the day is quite naive. Think about it. How are insurers competing?
First, the great bulk of costs are health insurance claims. Second, the portion of costs associated with administration are limited by law. Third, all insurers must accept those with pre-existing conditions and high health risks. Fourth, contrary to popular perceptions, insurers have modest profit margins to begin with. Fifth, health care cost trends are running at more than 8%.
Finally, how will insurers cut costs that reflect lower premiums; cut services to customers, further limit networks (except that is likely to be prevented by law), raise deductibles and co-pays?
The idea that competition did not exist before Obamacare because of pre-existing condition limitations is silly when you realize all insurers were playing by the same rules.
New filings trickling into the Arizona Department of Insurance show at least two health insurers plan to increase rates more than 10 percent. Cigna wants to increase rates an average of 14.4 percent and Humana, 25.5 percent.
And one of the largest health insurers in Arizona and the nation, UnitedHealthcare, has filed with regulators to join the next round of enrollment after sitting out the first year.
Insurers must file next year’s rates with both the state and the federal Centers for Medicare and Medicaid Services by the last week of June.
Arizona, one of 36 states on the federal health-insurance marketplace, had among the largest selection of plans and lowest average rates during the first year.
Analysts say that competition may force health insurers to temper rate increases or risk losing customers who can shop and compare plans over the marketplace. Before the health-care law, consumers had limited options because insurers could deny coverage to those who were sick or even those with minor ailments.
With such a wide selection of plans, it’s unlikely that health insurers will significantly hike rates if they expect to keep existing customers or attract new ones, said John Holahan, a fellow at the Urban Institute, a nonpartisan think tank.
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