Pennsylvania’s Affordable Care Act (ACA) marketplace, Pennie, has—despite its name—an affordability problem. Premiums and out-of-pocket costs keep rising despite—or rather because of—the government’s attempt to control both.
The common explanation is that greed and the free market are to blame. But there is no free market for health care. Pennie operates entirely within boundaries that the government sets: what insurers can provide, how much rates can rise year after year, and who qualifies for subsidized coverage. If greed is driving up costs, it’s operating within a system built by regulators, not by market forces.
For Pennie, Pennsylvania’s Insurance Commission caps how much premiums may rise each year—a form of price control. Price controls don’t reduce care-delivery costs; they prevent the premiums from reflecting the actual expenses. Those costs don’t disappear. They show up elsewhere: higher deductibles, narrower provider networks, more prior-authorization denials, etc. Enrollees pay more out-of-pocket costs or higher taxes.
Read full article here