Shortages of insurance providers and hospitals lead to higher insurance premiums under Obamacare in rural areas

The Patient Protection and Affordable Care Act was designed to make it easier for uninsured Americans to buy insurance at an affordable rate. But the exact opposite is happening in rural areas in many states, where a lack of insurance providers has eliminated competition between insurance companies, leading to higher prices, Reed Abelson, The New York Times reports. In the roughly 2,500 rural counties served by the federal exchange, 58 percent have plans offered by only one or two providers, and people in 530 counties only have one choice for a provider. A state-by-state interactive map is available by clicking here. (NYT photo by Rich Addicks: Shopping for insurance)

In Kentucky, all counties have at least two providers, but the Times found that in other states, competition among three or more providers is needed to make a substantial difference in premium rates.

“In rural regions, several factors combine to create a landscape that is
inhospitable to newcomers,” the Times reports. “Developing relationships with doctors and
hospitals can be costly where cities and towns are widely scattered and
the pool of potential customers is small.” States such as Wyoming, with a population of 600,000, are in a difficult situation. Tom Hirsig, Wyoming’s insurance commissioner, told the Times, “I think the problem was that the Affordable Care Act was designed for
where the majority of the people live, in the big cities where there’s a
lot of competition among health care providers. You’ve got to have some bargaining chips, and we don’t have that much.”

Many rural areas only have one hospital, “giving insurers little
leverage when negotiating reimbursement rates,” the Times reports. “Only one Wyoming county
is served by more than one hospital, said Stephen K. Goldstone, the
chief executive of WINHealth. In southwest Georgia, another rural region, Blue Cross and Blue Shield
of Georgia
is the dominant carrier, and it is the only insurer operating
in 54 of the state’s 159 counties. Only one carrier, Highmark Blue Cross, is offering coverage in West
Virginia, which has high rates of obesity and chronic diseases like
diabetes.” (Read more)

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