The federal Obamacare network has reduced competition in the healthcare sector by at least 29 percent, according to a new report from the Heritage Foundation.
“In the vast majority of states, the Obamacare exchanges will offer less, not more, insurer competition than the state’s current individual market,” says the report issued Monday.
For example, New Hampshire has two insurance companies, but will only have one working in the Obamacare network in 2014, says the report, titled “Health Insurers’ Decisions on Exchange Participation: Obamacare’s Leading Indicators.”
Only five states will see increased competition in the individual market — Oregon, New York, New Mexico, Montana and Massachusetts — said the author, Edmund Haislmaier, who is a senior research fellow in Heritage’s Center for Health Policy Studies.
But 25 states will see competition drop by 50 percent or more.
Competition drops by 83 percent in North Carolina, where the state’s 12 carriers will be reduced to two offering insurance via the government-run, taxpayer-subsidized Obamacare network.
The analysis admits that it understates the drop in competition.
That’s because the analysis includes any company that does business in even one of each state’s multiple regions.
“The California exchange divided that state into 19 rating regions,” the report notes.
“In three of those regions (encompassing Los Angeles and San Diego) there will be a choice of six carriers, while five other regions will have a choice of only three carriers… [so] in any given region of the state, enrollees will have a choice of plans from only one-quarter to one-half that [12] number,” said the report.
“Nationally, there is only one instance of an established insurer expanding into a new market in response to Obamacare,” said the report.
The drop in s competition contradicts 2009 predictions made by President Barack Obama.
“My guiding principle is, and always has been, that consumers do better when there is choice and competition,” Obama said during a joint session of Congress in 2009.
“That’s how the market works. Unfortunately, in 34 states, 75 percent of the insurance market is controlled by five or fewer companies. In Alabama, almost 90 percent is controlled by just one company… without competition, the price of insurance goes up and quality goes down,” he declared.
A prior report by Heritage says more than half of America’s 3,135 counties would experience an exchange with two or fewer insurance carriers and 78 percent would have a choice of three or less carriers. Ninety-four percent of counties would have a choice of five or fewer.
Caroline May contributed reporting to this story.