Another Broken Promise: Obamacare Killing Health Care Competition

Posted: Nov 11, 2013 11:30 AM

By now, almost all Americans know that President Obama lied when he promised the American people, "If you like your health-care plan, you’ll be able to keep your health-care plan, period."

But that is not the only lie Obama told when he was selling Obamacare. He also often promised that Obamacare would create, "A marketplace so people have choice and competition who right now don’t have it."

In fact, just last month, Obama was still promising, "What we’ve done is essentially create a competition where there wasn’t competition before. We created these big group plans, and now insurers are really interested in getting your business. And so insurers have created new health care plans with more choices to be made available through these marketplaces."

But that just isn't true.

The Heritage Foundaiton's Alyene Senger has conducted a thorough analysis of the health insurance marketplaces in all 50 states, and she found that Obamacare has decreased, not increased, health care competition in most states. From Senger's report:

  • In the vast majority of states, the number of insurers competing in the state’s exchange is actually less than the number of carriers that previously sold individual market policies in the state.[2]
  • At the local level, in over half of the 3,135 counties in the U.S.,[3] consumers will face an exchange market that is either a duopoly or monopoly. In 78 percent of U.S. counties, exchange enrollees will have a choice of coverage from three or fewer carriers.[4]
  • The exchange market in over 94 percent of U.S. counties will feature competition among five or fewer companies. In Alabama, about 96 percent of that state’s counties will have only one insurer offering coverage in the exchange.

Sanger concludes:

By the standards of the President’s own “guiding principle,” his law largely fails. Obamacare’s overregulation of insurance is to blame for the lack of competition in the exchanges. The flawed policies contained in Obamacare neither foster competition nor increase consumer choice, and they will continue to negatively impact American consumers and increase costs.