As we’ve shared on this site, one of the major benefits to a working Exchange is the competition it is supposed to create among insurance companies; with a larger market available to it and consumers able to view their offerings side-by-side with comparable plans from other companies, this idea was a major reason why Exchanges were included in the Affordable Care Act. Opponents of the law question whether there would be enough insurance companies competing to actually lower rates. However, in its “Wonkblog”, The Washington Post highlights an example of an Exchange actually working in lowering rates.
Oregon has been an early adopter of the ACA and has created the infrastructure for its Exchange ahead of schedule. As the article notes, when the insurance companies first posted their rates for their offered plans two weeks ago on the Exchange website, the rate variance was extreme. In the example highlighted, a 40 year-old Portland non-smoking male would have paid between $169 – $422 per month for the same standard plan. Those plans were listed in a grid so consumers, if the Exchange were live, could see side-by-side the price differences as well as the benefit differences.
The story notes that in the two weeks since, multiple insurers have requested “rate adjustments” due to a variety of reasons. However, the requested adjustments would bring those rates in-line or close to the lower rate ranges. While this is only one state, the fact that this aspect of the Exchange could work is promising to those small associations that are reliant upon working Exchanges for affordable insurance.