The Affordable Care Act was intended to usher in a new era of competition and choice in health insurance, and at first it succeeded. But increasingly, provisions in the law are undermining competition and wiping out start-up after start-up. If something isn’t done soon, the vast majority of new insurers formed in the wake of the ACA will fail, and many old-line insurers that took the opportunity to expand and compete in the new markets will leave. It’s a classic story of unintended consequences and the difficulties of regulation.
Flush with optimism after the ACA passed, dozens of new insurers formed to take advantage of the environment created by the law. Twenty three of these were co-ops given start-up funding by the ACA. In most states the new plans only grabbed a small share of the market, but enough to put pricing pressure on larger incumbent plans. In a few states, like New York, the start-ups and other new entrants grabbed over half of the business on the exchanges.
To the surprise of many, price increases in health insurance remained low by US historical standards even as the recovery continued and people who had been without insurance were finally able to get it. How much of that modest cost trend is due to an improved competitive marketplace on the exchanges is speculation, but what is clear is that the doomsayers about the ACA were wrong. Costs did not explode, and even with higher 2016 rate increases we are not back to the bad old days (yet).
“[We are supposed to gather information from patients] prior to the physician going into the room. It doesn’t happen. I’m going to be honest – the reality … is … we also are responsible for telephone triage, walk-in emergencies, diabetic meter teaching, I mean, the list goes on and on.”
As Hillary Clinton’s motorcade sped toward the Chicago hotel hosting the American Medical Association’s annual meeting in June 1993, the clergyman giving the invocation made a jarring request of God: that the audience not boo the speaker.
