As Republicans argue that Obamacare is ruining competition in the healthcare industry, they are facing mounting evidence to the contrary.
The average number of insurance carriers offering plans in the new marketplaces increased from six last year to seven this year, according to a new analysis the nonpartisan firm Avalere Health is preparing to release this month.
People buying individual market plans, both inside and outside the marketplaces, generally had access to more plans in 2015 than in 2014, a report posted Thursday by the Government Accountability Office found.
In the vast majority of the 1,886 counties the GAO surveyed, the lowest-cost plan was available through the state exchanges. And the percentage of counties with at least six plans offered in each of the marketplace pricing tiers (known as bronze, silver and gold) grew this year from last year.
The latest reports offer a contradiction of sorts to a notion often repeated by Republicans: that new regulations brought on by President Obama’s signature healthcare law are resulting in fewer choices for consumers and less incentive for insurers to keep costs low.
“You’ve seen some new players enter the marketplace — co-ops, multistate plans, Medicaid managed care organizations — so I think generally we have seen the exchanges kind of increase and diversify choice for the individual market,” said Avalere Vice President Elizabeth Carpenter.
At an Obamacare-themed panel Thursday, House Judiciary Committee Chairman Bob Goodlatte, R-Va., called the healthcare law “antithetical” to competition. The hearing was the third Goodlatte’s committee has held on the issue.
“Obamacare put in place a regulatory structure that stifled competition,” Goodlatte said. “Since the enactment of Obamacare, I have been sounding the alarm.”
Some opponents of the law are hinging their arguments on a different calculation that could undergird the arguments made by Goodlatte and others in his party.
Scott Gottlieb, a resident at the conservative American Enterprise Institute, acknowledges that consumers shopping for non-employer, individual market plans do have more choices now. But those choices aren’t offered by a larger number of carriers.
Instead, Gottlieb uses a stricter definition of what constitutes a carrier than does Avalere, which counts plans being newly offered in the exchanges that may have been sold previously or plans from smaller carriers selling in the marketplaces for the first time.
Gottlieb says that by doing his own research, he’s found that just 38 new health carriers entered the market between 2008 and 2015 — data he included in testimony to Congress Thursday. Goldman Sachs found that about 40 plans left the market over the same stretch of time, which, combined with Gottlieb’s research, would mean a net decrease in the number of plans.
“I think that ultimately gives you a sense of the competitiveness of the market — whether or not new carriers can enter,” Gottlieb told the Washington Examiner. “If you only see existing carriers offering new plans, that’s not sustainable.”
Gottlieb acknowledges there’s insufficient data to compare the rate at which new insurers were entering the marketplace before versus after the Affordable Care Act was passed. But he insists a new restriction on how much insurers can spend on overhead versus claims, called the medical loss ratio, has tamped down the creation of new insurers.
“I feel relatively confident this has been a barren period, with basically a lot of churn in the existing market,” Gottlieb said. “To me that’s not a truly robust market.”
But many other analysts disagree, saying that by requiring insurers to cover a similar range of benefits and directly compete for customers in the new, online marketplaces, the healthcare law has given U.S. consumers a larger array of choices that are easier to shop for.
The state-based marketplaces were specifically created for people who don’t have access to employer-sponsored coverage. Those of all incomes can buy plans on the exchanges, although those earning up to 400 percent of the federal poverty level and who don’t qualify for Medicaid can receive subsidies to help pay for their coverage.
“The Affordable Care Act … put in place efficient markets for shopping and bargaining,” said Thomas Greaney, a law professor at St. Louis University. “What do we have as a result? Well-functioning exchange markets.”
