More Competition Would Lower Health Insurance Premiums

I know, not exactly a shocking revelation! Nevertheless, here’s an article from today’s Washington Post:

With much of the focus on Obamacare now on how much individual premiums could increase next year, a new analysis suggests there’s one way to keep them in check — more competition. That’s the conclusion of a new report from economists Leemore Dafny, Christopher Ody and Obamacare architect Jonathan Gruber.

If every insurer that had sold individual policies in 2011 participated in Affordable Care Act insurance marketplaces this past year, average premiums for a benchmark exchange health plan would have been 11.1 percent lower in 2014, the economists found.

Big insurance companies generally took a cautious approach to the new exchanges in 2014, limiting their participation in the health-care law’s first year amid concerns about too many sick patients signing up for coverage. The Affordable Care Act exchanges were created as a way for people to buy their own insurance if they couldn’t find affordable options elsewhere, like through an employer.

The Affordable Care Act exchanges are supposed to fuel competition in the individual market, which hasn’t traditionally been all that competitive. Before the health-care law, a single insurer covered more than half of the individual market in 30 states, according to the Robert Wood Johnson Foundation.

A point I’ve been trying to make for a while is that there is a large untapped source of competition out there which could help lower prices: foreign insurance companies.  With or without ObamaCare, American consumers would be better off with more companies in the market, and the nationality of those companies does not matter.  Unfortunately, my sense is that foreign companies are not all that interested in entering the U.S. health insurance market.  Maybe it’s too daunting a prospect (it’s a highly regulated market), or maybe they just haven’t thought of it.  In case it’s the latter, I’m going to keep putting the idea out there, in the hopes that it reaches the right person.