The health insurance exchanges mandated in President Obama’s healthcare overhaul could fail to create more competition and lower costs, despite the government’s intent, according to a new study.
The new law orders every state to create a healthcare marketplace that would theoretically increase competition and drive down costs. But experts maintain this theory is in large part bunk when it comes to many parts of the nation, the Hill reports:
Rural areas with low populations tend to have less competition among insurance companies. They have fewer doctors and other healthcare providers, and are often dominated by one large insurer — in the case of the [Federal Employees Health Benefits Program], usually Blue Cross/Blue Shield.
The Health Affairs study says people in those areas generally pay higher out-of-pocket costs than people in more populated areas with greater competition.
"If experience with the federal benefits program is an indication of how much competition can be expected in the exchanges, then people obtaining coverage from exchanges will not benefit much from competition unless the exchanges are at least modestly assertive in setting conditions of participation for qualifying health plans," the authors wrote.