Report: Lack of insurance competition still a concern

Published online: Nov 06, 2013

One of the main arguments for passage of the Affordable Care Act in 2010 was that it would lower insurance prices for many Americans living in rural areas.

But according to a recent article in the New York Times, evidence is emerging that one of the program's loftiest goals-to encourage competition among insurers in an effort to keep costs low-is falling short for many rural Americans. The problem, according to the Times article, is that rural areas and small towns have far fewer carriers that are participating in the online insurance exchanges, which are designed to drive down premium costs through greater competition among insurance companies.

Jon Bailey with the Nebraska-based Center for Rural Affairs says that while the lack of competition is a concern, the Great Plains states seem to be faring better than other parts of the country.

"That article seemed to center on that the biggest problems are in the South," Bailey says. "I know in Nebraska, most rural places in the state are going to have at least three companies competing in the marketplace. So I think, given the insurance market and the concentration of the insurance market, that's pretty good for our part of the country."

Bailey says that people need to look beyond the "sticker price"-the cost of the insurance premiums-and consider what they might receive in the form of tax credit subsidies.

"The problem with the enrollment system is you only really see that one side of the equation. You don't see the subsidy side, so you don't know what the real cost to you is going to be yet," he says.

"I think when they're able to find that out, I think they'll be happy."

But Bailey says everyone's situation will be different. He says the Center for Rural Affairs' website features a wide array of resources to help answer many of the questions and concerns people have regarding ACA.