Close Close
ThinkAdvisor

Life Health > Health Insurance > Health Insurance

Witness: New insurers shun U.S. commercial health market

X
Your article was successfully shared with the contacts you provided.

Policymakers have had a hard time attracting a large number of issuers to the Medicare Advantage market, but that market is looking much livelier than the commercial health insurance market.

Dr. Scott Gottlieb, a health policy specialist at the American Enterprise Institute (AEI), gave data supporting that assessment Thursday at a hearing on the state of competition the health care marketplace organized by a House Judiciary subcommittee.

Dan Durham appeared on behalf of America’s Health Insurance Plans (AHIP) to summarize AHIP’s arguments that provider consolidation and coordination efforts have driven up health care costs. 

Richard Pollack, president of the American Hospital Association, blamed health insurers for any problems with lack of health care competition, and he noted that hospital prices have increased only 0.9 percent in the past year.

Dr. Barbara McAneny, a witness for the American Medical Association (AMA), said AMA member physicians are suffering both from consolidation of health insurers and from consolidation of hospitals. She said regulators should increase the level of competition in the hospital market by making it easier for physicians to start physician-owned hospitals.

“Low-hanging fruit in this area would be removing barriers to health care market entry that the government itself has created,” McAneny said, according to a written version of her testimony posted on the committee website.

Gottlieb presented AEA data on the level of competition U.S. commercial health plan market.

Between 2008 and mid-2015, only 38 new carriers entered the U.S. health insurance market, Gottlieb said.

Twenty-three of those carriers were part of the Patient Protection and Affordable Care Act (PPACA) CO-OP program, Gottlieb said.

Six of the new carriers were created by hospitals or other provider-led health systems, and just seven were new commercial carriers, Gottlieb said.

Meanwhile, Gottlieb said, analysts at Avalere Health found when they conducted a separate analysis of the Medicare Advantage market that 28 new carriers entered that market from 2012 through 2014.

Those new entrants are offering 104 plan options to about 14 million Medicare enrollees in 24 states, Gottlieb said.

The insurers in the Medicare Advantage market are going through a wave of consolidation, but “there is still new plan formation and new capital being invested behind the creation of brand new health insurance carriers,” Gottlieb said.

The Medicare Advantage market is benefiting from the aging of the U.S. population and the belief that new traditional Medicare system rules will push more enrollees toward the Medicare Advantage plan program, Gottlieb said.

See also: Why we need more Medicare agents