President Obama is for choice and competition in the health-insurance market, as befits a champion of the free market, except when he isn’t. “My guiding principle is, and always has been,” he said in 2009 when he was trying to sell Obamacare, “that consumers do better when there is choice and competition. That’s how the market works. In Alabama, almost 90 percent of the market is controlled by just one company. And without competition, the price of insurance goes up and quality goes down.”
Who could argue with that? Given the rapid increases in health care costs over the past decades, that was music in the ears of the American voters. Everyone knows that when just one or two companies corner a market, they’ll skimp on quality and raise prices. Greed is the enemy of the free market.
Two years after Obamacare opened for business, Mr. Obama’s health care scheme isn’t exactly solving the problem every American must deal with. A study by the Heritage Foundation finds that there’s less competition and more dissatisfaction than ever. The number of insurers has declined by 21.5 percent, and by the government’s own measurement the Obamacare exchanges are less competitive, by a factor of 75 percent, than before the Affordable Care Act was enacted by Democrats with no help, or votes, from Republicans.
In Mr. Obama’s example of Alabama, for example, the number of insurance carriers has plummeted by 87 percent since the president’s “era of greater competition” dawned. West Virginia, for another example, the number of insurance providers has declined from 24 to one. Like his infamous promise that “if you like your doctor, you can keep your doctor,” the promise of more competition goes into the whopper hopper. There is no real competition in the insurance marketplace, only a largely unresponsive monopoly.
This should not surprise anyone. The point of Obamacare was to “standardize” insurance plans across the nation. Assigning 310 million men, women and children to federally mandated one-size-fits-all plans cannot increase or enhance consumer choice. Obamacare has reduced choice, and as Mr. Obama predicted, fewer choices and less competition invite higher prices.
The Heritage report concludes that in 42 out of 47 states with comparable data insurance premiums have gone up — way up, in some cases by more than 100 percent over 2013 rates. Insurance deductibles have climbed, and on a steep trajectory. The Kaiser Family Foundation finds that deductibles are up nearly 50 percent from five years ago, to an average of $1,217. This year, the combined medical and drug deductibles for the average bronze plan is $5,331.
“Deductibles will keep going up as companies try to keep their own health care costs down by raising the amount of cost-sharing workers have to bear,” says Gary Claxton, a vice president of the Kaiser Family Foundation.
If the president had held to the “guiding principle” he touted in his first campaign, he would have discarded the Affordable Care Act the first time his experts brought it to him. Instead of addressing the problems of lack of choice and rising costs, he doubled down on disaster, and made things worse. Federal mandates have severely limited consumer choice, and prices have responded accordingly. To foster a market that works, Mr. Obama and his team of “czars” should quit trying to manipulate the marketplace and enable consumers to choose for themselves. They’re smart enough.