SHOP Exchange Rates 7% LOWER on ACA Exchanges than Off-Exchange Plans (aka Invisible Hand Part 12)
2019 OPEN ENROLLMENT ENDS (most states)
Time: D H M S
Whew! The Invisible Hand of the Free Market sure is giving its middle finger a thorough workout today...
Rates are lower on the new marketplaces than in the private market
...Health plans available to small businesses on the law’s new health marketplaces are on average about 7 percent cheaper than comparable plans offered elsewhere, according to analysis conducted by a team of researchers at the National Opinion Research Center at the University of Chicago. For middle-tier plans, for instance, the disparity translates into about $220 in annual premium savings for plans purchased on the SHOP exchanges.
Wow! And why is this the case, you may be asking?
...the results can likely be attributed to the one of underlying premises behind the exchanges — that is, to drive up competition among insurance carriers by placing their rates next to one another for shopping comparison. Indeed, health officials have reported cases of insurers revising their rates on the marketplaces after seeing lower prices from their competitors.
And this is important, because...
Another recent study conducted by research center showed that, among small business owners who do not currently offer health coverage, 82 percent said their decision to start providing insurance would depend on prices being lower than they are today.
Imagine that: Requiring insurance companies to actually follow the rules, compete against each other for business and display their offerings in an up-front, apples-to-apples kind of way without any fine print or double-talk results in lower prices and better value for their customers? What a concept!!