Competition and Choice: A Report on the ACA's 2016 Exchanges

Today, U.S. Senator Ben Sasse (R-NE) issued "Competition and Choice: A Report on the ACA's 2016 Exchanges." Using new data, this first of its kind congressional report provides a detailed, county-by-county analysis of consumer choice on the Affordable Care Act's (ACA) 2016 exchanges.

"This new data offers a grim picture of competition on the exchanges but, for millions of Americans, this isn't about spreadsheets—it’s about Washington's empty promises," said Sasse. "The Affordable Care Act has fallen short of the Administration's false claims. This report is a reminder that health care in this country is in serious need of true, patient-centered reform."

The full report is available here and key findings are summarized below.  

State-Level Competition: 2015 Exchanges vs. 2016 Exchanges

  • In 2015, there were a total of 307 insurers selling coverage on the exchanges nationwide. In 2016, there are 289 insurers selling coverage on the exchanges nationwide, representing a decline in competition of nearly 6 percent from 2015 to 2016.

County-Level Competition: Monopolies and Duopolies

  • More than 36 percent of all counties have a monopoly or duopoly, meaning they have only one or two insurers offering coverage on the exchange there. Another 26.8 percent of counties have only three insurers, totaling 63 percent of the nation's counties with three or fewer insurers to choose from in 2016.

  • Only 8.2 percent of the nation's counties have more than five insurers to choose among on the exchanges.

Noteworthy States

  • In Texas, there are 16 insurers selling coverage on the state’s exchange in 2016 – a number far higher than in most states. However, for those living in Texas, no one can choose from 16 insurers. Rather, two-thirds of the state’s counties have only one or two insurers offering coverage—a monopoly or duopoly. Only a single county – Bexar County – has even half the number of total insurers with eight. All others have fewer than half of the state total.

  • Using the Heritage Foundation's count of pre-ACA 2013 insurers, Nebraska is one of the few states that has the same level of insurer competition as the pre-ACA market. Despite being among the more rural states, Nebraska has nearly equal competition among four insurers across the state’s 93 counties.

  • In Utah, there are four insurers selling coverage on the exchange but consumers in 69 percent of the state’s counties have no choice at all. In those counties, only a single insurer is selling coverage.

  • In Wyoming, only one insurer offers coverage on the exchange, creating a monopoly at both the state and county levels.

  • In West Virginia, 82 percent of the state’s counties have only one insurer and the other 18 percent of counties have two.

  • In Wisconsin, there are 16 insurers selling coverage, but only one out of 72 counties has nine insurers, and 45 counties (62.5 percent) have five or fewer insurers to choose from on the exchange.

  • In California, there are twelve insurers offering coverage on the 2016 exchange but the average amount of insurer choice among all its counties is four.

The Need for Health Reform

The ACA’s exchanges have not increased insurer competition or consumer choice as originally promised.

  • The 2016 exchanges are significantly less competitive than the individual market was prior to the ACA’s implementation.

  • Nationally, there has been a net decline in insurer competition from last year’s exchanges.

  • Consumers face limited choice in a majority of the nation’s counties and in some instances have no choice of insurer if they purchase on the exchange.

  • The limited insurer competition, in combination with the ACA’s benefit mandates and taxes, has drastically increased the cost of coverage since taking effect in 2014. Premiums and deductibles continue to rise in 2016.

  • Unfortunately, the promise of increased competition and lower prices has not been fulfilled. To a large extent, Americans have fewer options thanks to the ACA’s flawed policies.

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