Texas | With something like a duopoly already; Does (Obamacare) create a Health Insurance Monopoly?

Below you will find an interesting excerpt from John Goodman,  a fellow at the National Center for Policy Analysis, based in Dallas.

• Blue Cross already has 70% of the market in three of the nine largest metropolitan areas.
• In all of them, and for the state as a whole, more than 60% of all customers buy from only two insurers.

The single most important feature of the Affordable Care Act (ObamaCare) is the establishment of a health insurance exchange where people will be required to buy health insurance if they are not insured by their employer or a government plan. As envisioned by Stanford professor Alain Enthoven, an early proponent of the idea, the exchange will be a model of competition... well...make that managed competition. (More on the "managed" part in a future Alert).

But rather than move toward a competitive world, we seem to be moving toward the opposite extreme: monopoly. Major consolidation is underway both on the provider and insurer sides of the market. And while this trend was already underway before Barack Obama became president, without doubt it is accelerating because of ObamaCare.
The graph below shows what things look like in the market for commercial insurance in major Texas cities:

• Blue Cross already has 70% of the market in three of the nine largest metropolitan areas.
• In all of them, and for the state as a whole, more than 60% of all customers buy from only two insurers.

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Cheers,
John Goodman
President and CEO
Kellye Wright Fellow
National Center for Policy Analysis
12770 Coit Rd., Suite 800
Dallas, Texas 75251
http://www.ncpa.org