Obamacare’s Death Spiral of Consumer Choice

Obamacare’s Death Spiral of Consumer Choice

REUTERS/Lucy Nicholson

The term “pro-choice” has a politically charged meaning, one that Democrats proudly assert when it comes to defending abortion. They also claimed that mantle for Obamacare. As we approach the fourth year of the exchanges, however, it’s clear that Democrats and Barack Obama have been as anti-choice in practice as it’s possible to be. 

When Democrats passed the Affordable Care Act, and the president signed the bill into law in March 2010, they predicted a bounty of choices and economic freedom for consumers across America. While insisting that the already insured could keep their plans if they chose (which won Politifact’s Lie of the Year for 2013 when millions lost their plans as the law came into full effect), President Obama and other Democrats described the ACA exchanges as a virtual insurance Utopia. They claimed increasing competition would drive down prices and expand access to larger numbers of providers. 

Related: Obamacare Insurers Are Looking for a Taxpayer Bailout 

The White House website still displays this claim. Under the heading, “More Choices, Greater Competition -- Health Insurance Exchange,” the site describes the Obamacare exchanges as a way for Americans to “pool their resources” and find more choice. “For Americans who get coverage through their job but can’t afford it, the exchange will give them new choices,” it promises, allowing consumers to “increase their buying power to make insurance more affordable.” 

As with the rest of the promises from Obamacare’s architects, these claims turned out to be a false sales pitch, every bit as flimsy as “if you like your plan, you can keep your plan.” 

Insurers have announced withdrawals from several exchanges for 2017, leaving more and more consumers searching for new plans. The White House has tried to downplay the significance of these retreats, but a new study from the Kaiser Family Foundation makes the crisis all too plain. 

In 2016, 85 percent of all Obamacare enrollees had three insurers from which to choose. In 2017, that number drops to 62 percent. This year, an estimated 300,000 enrollees had only one insurer available to them, which comprised only 2 percent of overall enrollment. Next year, 2017, that number will grow to 2.3 million – an estimated 19 percent of all enrollees, an eightfold increase. The same percentage will only have two choices, up from 12 percent in 2016. 

Related: UnitedHealth Makes Good on Threat to Pull Out of Obamacare 

The figures look worse from a geographical perspective. Thirty-six percent of all counties in the United States will have two or fewer insurers for consumers to choose. Many counties in the South and Interior West will have only one insurer for 2017. For those living in rural counties, which already have a provider crisis, the news is particularly harsh. 

“About 629,000 marketplace enrollees who live in primarily rural counties will likely have a single insurer in 2017,” the Kaiser study states, “representing 41 percent of all marketplace enrollees living in mostly rural counties (up from 7 percent in 2016).” But 15 percent of urban enrollees will also have only one insurer choice next year, an increase of 2 percent in 2016. 

What happened to all of the choice and competition Democrats from Obama down promised with the ACA? In 2009, Obama insisted on passing the law because five choices were too few to guarantee access. “Unfortunately, in 34 States, 75 percent of the insurance market is controlled by five or fewer companies,” the president lectured Congress in joint session. “In Alabama, almost 90 percent is controlled by just one company. And without competition, the price of insurance goes up, and quality goes down.” 

What does that say about the quality of care now under the ACA? Seven years ago, five insurers controlled “75 percent of the insurance market” in 34 states, which meant that more than five choices existed. Kaiser’s data shows that in 2017, only 15 percent of all enrollees will have more than five choices (from 33 percent in 2016), a dramatic drop thanks to the policy Obama pushed while promising the exact opposite outcome. 

Related: With Aetna Pulling Out, Can Anything Save Obamacare? 

And one other note: In 2017, one hundred percent of Alabama will have only one insurer in the Obamacare exchange. 

Many consumers have checked out of the exchanges, too — or more accurately, never checked in at all. The Congressional Budget Office projected an enrollment level of 24 million by 2016; Democrats projected it at 28 million. By the end of the enrollment period in March, though, enrollment stood at 11.1 million and has drifted down to 10.3 million as the next enrollment period approaches on November 1. 

What caused the shortfall? The Washington Post reported over the weekend that a combination of incompetent exchange design and skyrocketing premiums and deductibles had consumers opting to pay the penalties instead. “People who do outreach to the uninsured,” the Post’s Carolyn Johnson reported, “say the enrollment process itself has been more complex and confusing than Obama’s initial comparison to buying a plane ticket.” 

Related: Obamacare Price Hikes Could Cost Democrats Control of the Senate 

Another Obamacare promise bites the dust, but that’s hardly the most significant. Even for those who do get coverage, deductibles are so high that insurance only ends up covering catastrophic events and routine checkups that would cost just a few hundred dollars at most in a retail market. The ACA has not expanded choice but destroyed it, robbing Americans of their ability to gain insurance in a rational market and further eroding the buying power of the middle class. 

On every level, Obamacare has proven an abject failure. Let’s apply Barack Obama’s 2009 measure and get rid of the system that has forced prices up while driving choice and quality down.