Choice and Competition On California’s Exchange

Published January 16, 2015

One of the things proponents of Obamacare have touted is that the law supposedly brings competition and choice to the health insuance market. Today I ran across two articles. Here’s the first:

Limited Insurance Choices Frustrate Some Patients In California

When Dennie Wright went to sign up for Affordable Care Act insurance last year, it wasn’t a hard decision. His insurance agent told him he had only one insurer – Anthem Blue Cross – that he could buy from on the exchange, Covered California.

Wright lives in a modest house overlooking a pasture in Indian Valley. It’s a tiny alpine community at the northern end of the Sierra Mountains, close to the border with Nevada. He lives in one of 250 zip codes where Blue Shield of California stopped selling individual insurance policies in 2014…

Lower income people cannot take their business to a competitor, because the exchange is the only place customers can use federal subsidies to help them buy health insurance. And for those people, Anthem is the only option…

Here’s the second:

California rejects UnitedHealth’s bid to sell Obamacare statewide

California’s Obamacare exchange rejected a bid from the nation’s largest health insurer to start selling coverage statewide next year.

The Covered California board adopted new rules Thursday that sharply limit where industry giant UnitedHealth Group Inc. could offer policies to individuals.

Many consumer advocates backed the exchange’s decision. But California Insurance Commissioner Dave Jones panned it, saying Californians deserve more choice and competition statewide.

Covered California’s move to limit UnitedHealth could be a boost to the four largest health insurers already in the exchange. Led by Anthem Inc., they accounted for 94% of state enrollment in the first year…

UnitedHealth had a chance to join Covered California when it launched in the fall of 2013 as part of the health-law rollout. Instead, the company exited California’s individual insurance market and bypassed most of the Obamacare exchanges nationwide.

Peter Lee, executive director of Covered California, said established insurers shouldn’t be free to come in right away. Those insurers, he said, should not be allowed to undercut rivals who stepped up at the start and made significant investments to sign up 1.2 million Californians during the first open enrollment…

“United or other plans that were in the market in 2012 should have a higher bar” to joining the state exchange, Lee said. “We think the health plans that helped make California a national model should not be in essence undercut by plans that sat on the sidelines.”

Choice means being allowed to choose whatever the politicians will allow you to choose, and firms will only be allowed to compete if they fall in line with the demands of those politicians. Obamacare can’t be repealed soon enough.