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View Diary: Post exposes an inconvenient truth - insurers will still cherry pick (168 comments)

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  •  This makes a good addition to... (5+ / 0-)

    to the counter-argument against intra-state competition idea being pushed by conservatives. This shows that just because insurance companies can compete, it doesn't mean they will. A lot of people will still be left without an option.  

    Other reasons to push back against intra-state competition that I see:

    1. It will create a "race to the bottom" environment with states weakening their regulations in order to entice insurance companies to originate plans in their state. It will no longer matter if you live in a state with strong consumer protections. You will only have as much protection as the weakest state is willing to offer.  We'll all end up with insurance plans from North Dakota or Delaware, just like we did with credit cards.
    1. Rural areas will still be left with little choice. It is expensive on a per-plan-sold basis to do business in rural areas. Insurance companies only go into rural areas if they can win 80-90% of the available business. Intra-state competition will not change this.
    1. Intra-state competition will result in lower so-called "medical loss ratios." Marketing costs will increase as they try to steal each others healthy patients but because of the need to be competitive on pricing those costs can't be recouped in the form of higher premiums. So to maintain or increase profit margins, the medical loss ratio will have to decline.

    I came up with these on my own so I hope they are correct. I've been looking for a good source for counter-arguments to the conservative talking points. Know of a good one? So far I've just coppled my own guide together. Maybe I should make it into a diary.  

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