Monopoly concerns beg question on public option

Document titled "Patient Protection and Affordable Care Act"

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The number of counties where ACA marketplaces have only one health insurer is set to increase dramatically, sparking renewed concerns about payer monopolies.

The number of regions featuring only one insurer has risen from seven percent of counties nationally to 31 percent, according to an analysis conducted by the Kaiser Family Foundation on behalf of the Wall Street Journal. 

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Tech start-up Oscar Health is the most recent billion dollar plus insurer to announce substantial reductions in ACA offerings

The individual mandate combined with only one insurance carrier to choose from produces a situation where the insurer has greater ability to increase prices without losing enrollees. Having a low number of insurers on exchanges is “likely to lead to a very pricey exchange,” Harvard Business School’s Leemore Dafny told the WSJ.

The burden of higher premiums won't necessarily fall completely on enrollees' shoulders, however, as the Affordable Care Act is designed to link federal subsidies with changes in premiums.  

The counties where marketplaces have only one insurer will impact approximately two million enrollees, or 19 percent of total enrollees. The news represents a stark departure from last year’s open enrollment, when approximately two percent of enrollees had only one choice of insurer, the article notes.

At this point, a public option looks like an increasingly pragmatic policy maneuver, which could fill in coverage gaps where private insurers have elected not to operate, as in the case in Pinal County, Arizona.

“A number of steps remain before the full picture of this year’s marketplace competition is known, but the ACA has greatly expanded the insurance options available to consumers in the individual marketplace, a spokeswoman for the Department of Health and Human services told the WSJ

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