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How Obamacare May Help Make Health Care Cheaper By Forcing Insurance Giants To Compete

By Tara Culp-Ressler  

"How Obamacare May Help Make Health Care Cheaper By Forcing Insurance Giants To Compete"

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More than 120 insurance plans want Americans to be able to buy their products on Obamacare’s new insurance marketplaces, one of the key provisions of the health law that will take full effect in 2014. The Obama administration is heralding that news as more proof that the Affordable Care Act is already doing its part to positively impact the health industry, since it will allow more people to choose between different insurance plans to find the one that’s the best fit for them.

Currently, several large insurers have a huge monopoly on the country’s individual insurance market. In most states, half of the entire market is covered by just one company — which doesn’t leave people with very many options when they need to buy health care. Obamacare hopes to change that. If more insurers are forced to compete with each other to provide plans that will be attractive to the American people, they will hopefully have to expand their benefits or lower their prices to remain viable.

And, according to a memo released on Thursday by the White House, administration officials estimate that Obamacare is on track to meet this goal. They’re optimistic about the number of insurers who have already signed up for the health law’s state-level marketplaces, especially since about a fourth of them are new competitors who weren’t offering any plans in those places before. Based on the administration’s estimations, about 90 percent of the Americans who enroll in the marketplaces in 2014 will be able to choose between five or more different insurance companies.

That’s a huge improvement over the current status quo. Of course, there’s no guarantee that the wide variety of insurance plans will compete with each other effectively and make their health care services cheaper for the Americans who need them. But, as the White House put it, “the early signs are promising.”

Setting up the insurance marketplaces is one of the last major Obamacare provisions to take effect — and as the administration works to prepare for that enrollment period to begin in 2014, critics on both sides of the aisle have decried their efforts to implement the health reform law as a “train wreck.” While overhauling the nation’s current health care system certainly hasn’t been without some bumps along the way, Obamacare has not exactly been disastrous so far. The health reform law has already provided better preventative care for millions of previously-insured Americans, forced some health insurers to lower their premiums, and begun to encourage a greater emphasis on primary care.

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