One of the biggest problems with Obamacare is only getting worse

Obama scowlChip Somodevilla/Getty ImagesU.S. President Barack Obama

It’s going to be a lot easier for people to pick an Obamacare plan in 2017, if only because there will be less to choose from.

One of the biggest drivers that causes increased costs of healthcare is the lack of competition in some markets. This problem is acutely present for the Affordable Care Act’s public insurance exchanges, according to a new study by Avalere Health.

According to the healthcare consulting firm, the high profile exits of large insurers such as Aetna, UnitedHealthcare, and Humana have eliminated a significant amount of competition within the exchange market.

“A new analysis from Avalere finds that nearly 36 per cent of exchange market rating regions may have only one participating insurance carrier offering plans for the 2017 plan year and there may be some sub-region counties where no plans are available,” said a post on the study from Avalere President Dan Mendelson.

“Nearly 55 per cent of exchange market rating regions may have two or fewer carriers.”

Avalere went through each of the coverage regions (the size of which can vary by state) and analysed the current offerings by health insurers in 2016 and the so-far announced offerings for 2017.

The firm found that there are seven states — Alaska, Alabama, Kansas, North Carolina, Oklahoma, South Carolina, and Wyoming — in which every single coverage region only has one participating insurer. When this occurs, it essentially gives the insurer a monopoly and forces patients in that region to accept the premium that company offers.

Competition in the health insurance market has been a focus of government regulators for some time. One of the main reasons cited by the Department of Justice for blocking the mergers of Anthem and Cigna as well as Aetna and Humana was due to concerns over decreased competition.

This analysis only takes into account the announced moves from the three companies that plan to roll back their offerings, so there is a chance some insurers may step in to the underserved markets.

As it stands now, however, it appears one of the largest drivers of high healthcare costs for Obamacare is only getting worse.

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