In early September, Aetna subsidiary Carelink/Coventry Health Care decided to pull out of the new insurance exchange established by Obamacare in West Virginia. Just one company will sell policies on the Mountaineer State’s exchange, which is set to open October 1.
About the same time, the non-profit FirstCarolinaCare Insurance did the same in North Carolina. So there will be just two carriers on North Carolina’s exchange.
It wasn’t supposed to be this way.
For three-and-a-half years, Democrats from President Obama on down have promised that the federal health reform law would create vibrant, competitive markets across the country, where people could go online and with a few clicks pick from a variety of competing health plans. The exchanges were supposed to be like Travelocity for health insurance.
Instead they’ve been plagued with technical problems, bureaucratic delays, and mountains of rules and regulations, to the point where most won’t function well, if at all, on opening day. And now insurance companies are backing away, out of fear that disaster looms ahead. The result will be little competition — and much higher prices.
Insurance giant Aetna for example, had initially planned to enter 14 markets. It ended up pulling out of five of them. The company even left the exchange in Connecticut, where it’s headquartered.
United Healthcare will venture into only 12 states — after saying previously that it might join 25.
And while Cigna sells individual policies in 10 states, it’s planning to participate in the exchanges of just five of them.
These companies are even steering clear of huge markets like California, Pennsylvania, and New Jersey.
Illinois’s insurance office predicted that 16 companies would sign up to do business in its exchange. Only six did so. Nebraska will have only four. And in Connecticut, consumers will have to choose from just three insurers.
The companies that have signed onto the exchanges have tended to be smaller, regional firms — or those that have never sold commercial insurance before. A study by the McKinsey & Co. consultancy found that 26 percent of the companies joining the exchanges are new carriers. In California, all but four of the 12 are selling commercial insurance for the first time. Half of those in New York are new to the market.
Whether these companies will have the knowledge, resources, expertise, and network of doctors and hospitals needed to succeed is an open question. Any failures will prove highly disruptive.
For small businesses counting on Obamacare to help them provide insurance to their workers, the situation isn’t any better.
Small businesses in Milwaukee, for example, will have just one or two companies to choose from, depending on where they operate. The one insurance firm that signed up for Washington state’s small-business exchange will only operate in two of the state’s 39 counties.
Full article: http://www.forbes.co … nd-nobody-showed-up/
