Bringing the Economy Home

Will Idaho’s Health Insurance Exchange Bring More Competition?

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The Obama administration has taken a few hits this month over the federal health care law. The administration’s decision to put off creating an insurance marketplace aimed at small businesses brought dismay. Then, Sen. Max Baucus (D-MT) predicted a “train wreck coming” as key aspects of Obamacare are implemented. His concern? People simply don’t understand what the law does. A recent Kaiser Family Foundation survey backs that up.

Now, a Stateline article argues the lack of competing health insurers within some states could hamper the health insurance exchanges established under the law. Christine Vestal writes:

[I]t is unclear how many insurance carriers will decide to seek approval for selling their products through these online marketplaces. Insurance companies have been mostly silent about their plans, with some citing uncertainty about federal and state rules as a reason for holding back.

Some fear that any uptick in competition will bypass those states where doctors are in short supply and the number of hospital systems is limited. A recent analysis by the American Medical Association found that a single insurance company held 50 percent or more of the market in nearly 70 percent of local markets nationwide. – Stateline

That AMA report shows that one insurer, Blue Cross of Idaho, controls 47 percent of Idaho’s health insurance market. That’s not bad compared to Alabama, the least competitive health insurance market in the nation, where one insurer holds 88 percent of the market. It puts Idaho in the middle of the pack, in terms of market concentration.

Idaho Department of Insurance Director Bill Deal points out that Idaho’s small population has historically dissuaded insurers. Many companies have chosen not to participate in the state’s small individual insurance market, he says. He hopes Idaho’s health insurance exchange will lead to greater competitiveness.

“We’re one of the states that have what we call an open market,” Deal says. “If other insurance companies want to come in and participate in the exchange for Idaho, the door is wide open. And we know of at least one that may come in and be a competitor in the small group market.”


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