Choice-free: The Obama-Shaheen market
Here is how New Hampshire’s so-called “health insurance exchange” under Obamacare will work when it comes online Jan. 1. Granite Staters who need health insurance and have not found it through an employer or the actual marketplace will come to this government-created “market,” where a grand total of one insurer will offer plans. Every one of the plans offered by the single participating insurance company will have to provide government-mandated minimum coverage that starts at $498.79 a month. This is “choice” under Obamacare.
In a real market, people can choose from a wide variety of providers who offer a wide variety of options. New Hampshire used to have that kind of health insurance market. Regulations destroyed it.
In addition to the numerous coverage mandates dictated by the Legislature, the state tightly restricts the ability of insurers to charge prices that reflect the actual risk posed by a customer. That was the result of a 1994 “community rating” law sponsored by then-state Sen. Jeanne Shaheen. At the time, insurers charged people different rates depending on how much of an insurance risk they were. That is what insurance does. In 1994, New Hampshire had the second-lowest health insurance costs in the nation. Then came community rating, which forced insurers to base their rates largely on geography, not risk.
At least 21 insurers immediately stopped offering coverage in the state. New Hampshire’s insurance costs rocketed from the second-lowest in the nation to the second-highest. It was a colossal disaster, and it remains the law.
Now comes Obamacare, with its “exchange” in which insurers must offer mandatory minimum coverage at prices determined by the government. Of the state’s few remaining insurers, only one is willing to offer coverage under such rigid regulations.
In 1994, a young, healthy Granite Stater seeking private health insurance was able to choose from among 26 insurers. In 2014, a young, healthy Granite Stater seeking private health insurance through the Obamacare “exchange” will get to choose from only one insurer.
This is New Hampshire’s health insurance market as Jeanne Shaheen and Barack Obama have shaped it.