ACA-Driven Competition Lowers Health Insurance Premiums - The Minute

ACA-Driven Competition Lowers Health Insurance Premiums - The Minute

Multimedia from this Release

Thursday, September 11, 2014 - 4:00pm


CONTENT: Multimedia with summary

A key point in the argument for the Affordable Care Act was that its reforms would lower the cost of health insurance by increasing competition among insurers. Now, with the Act in action, the question becomes, just how much savings are being produced? A projected eleven percent, concludes a new study by researchers from Northwestern University and M.I.T., potentially saving one point seven billion dollars in federal premium subsidies. That’s their hypothetical finding through an analysis of 34 state exchanges, based on projections IF all health insurers in every state’s 2011 market had joined that state’s exchange in 2014—which they did not. If just one company of the many who did not participate in 2014 had joined state exchanges—United Healthcare, the nation’s largest with 84 million policies—premiums would have been lower by five point four percent.

Other studies have shown other numbers, so a firm figure for savings from lowered premiums by insurers is hard to measure. Savings are not equal when some states have 17 insurers, as does New York, and others have just one, as does New Hampshire. And savings are not higher percentage-wise when exchanges have many competitors instead of just a few.

The good news is that more competition is projected for 2015. UnitedHealthcare has announced that it will enter 24 new markets next year. As more insurers offer more plans in more exchanges, premiums will drop and benefits rise. That’s a good outcome for the current, sickly health care industry.

I’m John Howell for 3BL Media.

Video Source: ACA-Driven Competition Lowers Health Insurance Premiums