When The Affordable Care Act was first conceived, its goal was to provide competition in the marketplace to drive down the cost of health insurance. As of right now, just one private insurer, Anthem BlueCross BlueShield, has applied to compete on the NH health exchange. Contrast that with California, which has 13 options and Colorado, which has 11 options. Although New Hampshire is the only state so far with just one plan on the exchange, its neighbors, Rhode Island and Vermont, are not far behind with just two carriers seeking to sell policies on their exchanges.
New Hampshire has opted to state-federal partnership to run the health exchange as mandated by ObamaCare. You can find more info on its efforts at New Hampshire’s Insurance Department’s website.
One Plan Is Typical For New Hampshire’s Current Market:
In the months since the ObamaCare Act passed, there was optimism that there would be more choices and lower premiums in small markets like New Hampshire. However, it appears that having just one option on the New Hampshire health exchange will make the marketplace look very similar to their current individual market, with one insurance company covering at least 80 percent of all insured individuals.
In effect, Anthem BlueCross BlueShield will have a monopoly in New Hampshire; however, this does not mean premiums will be higher in that state than in other states where there will be more companies competing for business. The price of health insurance, at its most basic, is a direct result of how much care actually costs, so competition on the NH health exchange wouldn’t necessarily lead to lower premiums.
One Plan Is Not Necessarily Negative For NH Health Exchange:
In fact, many experts believe that having a monopoly on the NH health exchange, at least for the first year will give Anthem BlueCross BlueShield more negotiating power with hospitals and physicians. The company can enter into contract negotiations with more leverage since it will insure the majority of individuals in the state. They can effectively lower prices of health care, which in turn will lower the price of premiums for Qualified Health Plans. Hospitals and physicians may not give those kinds of discounts to companies that have a smaller market share.
It is important to remember, though, that even though residents of New Hampshire will not get any choice in terms of insurance coverage in 2014, there is likely to be more options in 2015 and beyond. MVP Health Care, which is one of the two insurance companies selling on Vermont’s exchange in the first year, is monitoring the situation in New Hampshire and will possibly enter the NH health exchange in 2015.
As for Anthem BlueCross BlueShield, President Lisa Guertin, indicates they welcome competition, but they have no plans to exploit the monopoly during the first year of doing business on the NH health exchange.
NH Health Exchange May Have Multi-State Plans In Future:
There is another option of “multi-state plans” which can provide more competition in an insurance exchange. Theory was that by 2017, the federal government would enter into a contract with two private health insurance companies to establish “multi-state plans” that will compete with each other in all 50 states.However, those multi-state plans have three years to be in every state. In 2014, they only have to be available in 30 exchanges. This means that national health insurance companies will likely not pick smaller markets for the first year, and this means the NH health exchange will probably only have one option for individuals.
Most people are required to have health insurance in 2014 as mandated by ObamaCare. To find out, whether you need to buy health insurance in 2014, see this post. There will be medicaid expansion and health premium credits available to lower the cost of health plans.