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ObamaCare Exchanges: Less Choice, Higher Prices

You may recall this apology from President Obama to people who lost their insurance.  At about the 45 second mark he claims the insurance on the exchanges will be cheaper and there will be more choice of policies:

I have a new study out today titled “ObamaCare Exchanges: Less Choice, Higher Prices,” that tests those claims.  In short, they don’t hold up.

The study examines the choices and prices of insurance that a single 27-year-old and a 57-year-old couple has on the exchanges and then compares those to what was available in 2013 on (“eHealth) and (“Finder).  Here is what the study found for the choice of insurance for a single 27-year-old:

A 27-year-old male had, on average, ten more policies to choose from on eHealth versus the exchange and 31 more on Finder. A 27-year-old female had an average of ten more insurance options on eHealth and 38 on Finder. There were an average of nine more policies on eHealth and 19 more on Finder for a 57-year-old couple.

Across all areas examined, the exchanges have resulted in a substantial reduction in choice. For 27-year-olds, there were 442 fewer policies on the exchanges versus eHealth, a drop of 18 percent. There were 1,306 fewer policies on the exchange versus Finder for 27-year-old males and 1,716 fewer for females, declines of 38 percent and 46 percent, respectively. For 57-year-old couples, there were 406 fewer policies on the exchanges compared to eHealth and 855 fewer versus Finder, drops of 18 percent and 31 percent, respectively. 

The study examines choice and price across metropolitan areas in 45 states.  In most areas, consumers had access to many policies on eHealth and Finder that were cheaper than the lowest price policy on the exchange. That includes even some people who had access to subsidies, such as a 27-year-old making $25,000 annually:


Thus far the exchanges have resulted in fewer choices and higher prices for consumers shopping for insurance. That will get worse if and when the exchanges start moving toward a death spiral.

For more, go here.

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