Last updated on: 8/12/2010 | Author: ProCon.org

Does Obamacare encourage health insurance competition?

PRO (yes)

Pro

David Balto, JD, Senior Fellow at the Center For American Progress, wrote in his June 25, 2010 memo “Making Health Care Competition Work,” published on the Center For American Progress’s website:

“The Patient Protection and Affordable Care Act (PPACA) takes great strides to restore competition in health insurance markets…

Three critical elements of PPACA serve to enhance competition in health care markets: the creation of state health insurance exchanges, requirements for clear and standardized information about plans, and standardized processes for reviewing rate increases…

PPACA takes excellent measures to promote competition…”

June 25, 2010

Pro

The US Department of Health and Human Services website HealthCare.gov provided the following statement on its “Establishing Health Insurance Exchanges and a New Competitive Market” fact sheet (accessed Aug. 9, 2010):

“The Affordable Care Act helps create a new competitive private health insurance market – through state-run health insurance Exchanges – that will give millions of Americans and small businesses access to affordable coverage…

…[E]xchanges will… increas[e] competition among private insurance plans through greater comparative shopping and more informed consumers…”

Aug. 9, 2010

Pro

Barack H. Obama, JD, 44th President of the United States, stated in his Mar. 25, 2010 speech on health care reform delivered in Iowa City, Iowa, available on the Iowa Independent’s website:

“…[T]his reform… tells the insurance companies that in exchange for all the new customers they’re about to get, they have to start playing by a new set of rules that treat everyone fairly and honestly.  The days of the insurance industry running roughshod over the American people are over…

Once this reform is implemented, health insurance exchanges will be created – a competitive marketplace where uninsured people and small businesses will finally be able to purchase affordable, quality insurance.”

Mar. 25, 2010

Pro

Uwe E. Reinhardt, PhD, James Madison Professor of Political Economy at Princeton University, wrote in his Feb. 26, 2010 New York Times Economix blog “A ‘Government Takeover’ of Health Care?” published on the website of the New York Times:

“The [health care] bills do call for a major reform of the individually sold health insurance market…

…[T]o make the market for [health] insurance fairer, more transparent and more competitive, insurers would offer their policies on organized health-insurance exchanges…”

[Editors Note:In March 2010, President Obama signed the Patient Protection and Affordable Care Act (HR 3590), the Health Care and Education Reconciliation Act of 2010 (HR 4872), and Executive Order 13535 which restricted federal funds from being used for abortion services. Pro, Con, or Not Clearly Pro or Con positions made prior to the final wording of these three elements of the health care reform legislation may have changed since March 2010.] Feb. 26, 2010

CON (no)

Con

Steven Horowitz, PhD, Professor of Economics at St. Lawrence University, wrote in his Feb. 4, 2010 op-ed “The Verizon Wireless Cure for Health Care Reform” published by the Christian Science Monitor:

“…[N]either version of the healthcare plans in front of Congress allow space for healthy competition.  The various health insurance ‘exchanges’ and byzantine combinations of subsidies and penalties that the proposed legislation contains will only further restrict competition.  Restrictions force insurance companies to offer only those plans that meet government approval.”

[Editors Note:In March 2010, President Obama signed the Patient Protection and Affordable Care Act (HR 3590), the Health Care and Education Reconciliation Act of 2010 (HR 4872), and Executive Order 13535 which restricted federal funds from being used for abortion services. Pro, Con, or Not Clearly Pro or Con positions made prior to the final wording of these three elements of the health care reform legislation may have changed since March 2010.] Feb. 4, 2010

Con

Kathryn Nix, Research Assistant at Heritage Foundation’s Center for Health Policy Studies and the Roe Institute for Economic Policy Studies, wrote in her Apr. 20, 2010 webmemo titled “Obamacare: Impact on the Uninsured,” published on the Heritage Foundation’s website:

“Obamacare expands coverage by increasing the size of government.  Rather than making health insurance markets more responsive to Americans’ personal wants and needs, lawmakers enacted a top-down approach that will impose their will on the rest of the country.  This ‘reform’ will result in less choice and competition for health care consumers…

President Obama and congressional leadership promised the American people health care reform that would increase access to health care while simultaneously creating greater choice and competition and curbing increasing health expenditures.  Instead, lawmakers passed into law a top-down, heavy-handed government approach that will increase coverage at the expense of the other two objectives, instead limiting choice and increasing health spending.”

Apr. 20, 2010

Con

Scott Gottlieb, MD, Resident Fellow at the American Enterprise Institute, wrote in his May 22, 2010 article “Patients Left with Fewer Options,” published on the American Enterprise Institute’s website:

“Insurers are… pulling out of the individual insurance market because of new regulations that fix their profit margins and impose mandates on how they have to spend their revenues.  In time insurers will also start to leave the small group market for several reasons…

The vertical integration among insurers will leave many markets with little or perhaps no choice among health plans…

Insurers and providers are making these defensive business decisions largely because better competitive options are foreclosed to them by the Obama plan.”

May 22, 2010

Con

Karl Rove, former Senior Adviser and Deputy Chief of Staff to President George W. Bush, wrote in his June 17, 2010 Wall Street Journal article “The Bad News About ObamaCare Keeps Piling Up”:

“Health-care plans that existed before the new law are ‘grandfathered’ with regard to some of its provisions…

Health plans would no longer be grandfathered if a business changes insurance companies, raises deductibles more than 5%, drops any existing benefits, or even increases co-pays by as little as $5…

Complying with these new rules would raise costs for companies who provide coverage [and] reduce competition among health insurance companies.”

June 17, 2010