Insurance exchanges are effective

Unlike Alabama, which is dragging its feet at every step, Oregon has been proactive in efforts to set up the online health insurance exchange contemplated by the Affordable Care Act.

The theory among officials at the Oregon Insurance Division is that competition is good. Insurance exchanges add market forces to an insurance industry that — especially in Alabama — has successfully avoided them. When consumers can compare the products offered by competing insurers, prices come down.

That’s the theory. Does it work?

Apparently so.

Last week, Oregon posted a preliminary version of its exchange, a web site called Cover Oregon. The site posted 2014 health premiums as proposed by various health insurers.

The proposed 2014 premiums for a 40-year-old non-smoker ranged from $169 a month to $422 a month for the same standardized plan.

The result was no surprise. Health insurers are scrambling to reduce their premiums before October, when the final version of Oregon’s insurance exchange takes effect.

The popular complaint is that “Obamacare” is somehow antithetical to the competitive forces that are at the core of a vibrant market. To the contrary, the insurance exchanges enhance competition in a health-insurance industry dominated by monopolistic control.

Gov. Robert Bentley — who supported the idea of insurance exchanges before politics forced him to disclaim anything associated with the Affordable Care Act — has refused to participate in setting up an insurance exchange in Alabama. Hopefully the federal government’s effort to set up an exchange will provide the same benefits to Alabama consumers that the Oregon exchange already is promising.

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Filed under Alabama politics, Free Market, Obamacare

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