So, Obamacare starts its second signup period on the 15th of November. So this is a good time to look back and see what has happened. Are rates going up as much as they used to? Is there more consumer choice? How has Obamacare affected health insurance costs?
Luckily, the annual study of health insurance premium rates done by the McKinsey Center recently came out, so we have some hard (and unbiased) data to evaluate.
Some of their key observations are:
- Competition and choice are increasing. The number of health insurers in the exchanges increased by 26%, and the number of products grew by 66%. This is excellent news.
- Gross premiums are likely to increase. The median rate increase – for existing products – is 4% (which is really good, compared to previous years with double-digit increases, and puts the lie to the GOP claim that prices would skyrocket under Obamacare).
Not only that, but because of increased competition and all those new products, they predict that many people who are seeing rate increases will pick new, less expensive plans, which will reduce real rate increases to less than 2%.
Can anyone remember the last time health insurance rates went up less than 2 percent? Neither can I.
I’m a strong believer in competition. Isn’t it ironic that government regulation of the health insurance industry has unequivocally increased competition? Now consumers have a real marketplace where they can compare products, and figure out which ones give value for money.