A new study shows that Obamacare has made it possible for the dominant health insurers to jack their rates:
Our study shows that the largest issuer in each marketplace had a 75% higher premium increase from 2014 to 2015 compared to other same-state issuers (p=0.03, one-tailed paired t-test). On average, the largest issuers raised rates by 23.9%, while the other issuers only raised rates by 13.7%. Moreover, the largest issuers’ premium increase affects a larger proportion of plans (p=0.008, one-tailed paired t-test) and do not seem justified from the standpoint of incurred claims-to-premium ratio (p=0.31, one-tailed paired t-test for higher claims ratio). Projected Index Rate from the rate review process is used as a summary of an issuer’s premiums across different plans and Projected Member Months as a proxy for on-exchange market share. Our findings suggest that even after the Affordable Care Act, the largest on-exchange issuers may be in a better position to practice anti-competitive pricing compared to their same-state counterparts.