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Health Care Reform:

Health Insurance & Affordable Care Act

Lack of Competition, High Rates in Alabama

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Hardy, 56, a single Republican who runs a storm-shelter installation business, said she won't qualify for subsidies, either. Her monthly cost to cover herself would rise 77 percent to $478, and her deductible would increase by a third, to $2,000.

"I'm going to drop them" and look for a non-BlueCross plan, she said.

That may be difficult. BlueCross is the only carrier selling coverage statewide through the Affordable Care Act’s online marketplace, or exchange. Other carriers, Humana and UnitedHealthcare, hold tiny pieces of the individual coverage market and often offer smaller networks of doctors and hospitals.

'The Stroke Belt'

"Nothing changed in Alabama" after health law provisions kicked in, said Chad Gay, an insurance broker based near Birmingham. "In 2013 you’ve got Blue Cross, United and Humana. In 2014 you've got Humana, Blue Cross - and outside the exchange - United. Same players, higher rates. Great."

Another factor pushing up costs is a high rate of chronically ill residents. Because insurers cannot bar those with pre-existing illness starting next year, many higher-cost consumers are expected to join the coverage rolls.

"There are lots of sick people here," said Michael Morrisey, a health economist at the University of Alabama, Birmingham. "There's the stroke belt" extending across the South "and diabetes and heart disease."

Even so, better state regulation and more insurers bidding for business could have saved Alabamians substantial money, said Jim Carnes, policy director for the Alabama Arise, which works to improve life for low-income Alabamians. 

If Gov. Robert Bentley spent as much energy recruiting insurers to compete against BlueCross as he does wooing industry and entrepreneurs, he could lower prices under the federal health law and boost access to care, he said.

"But instead he chose to remain passive," said Carnes. "And as a result we have the lowest level of competition on the country."

BlueCross Responds

BlueCross spokeswoman Koko Mackin said that the company offers "high quality coverage at some of the lowest premiums in the country" and that "our customers' faith in us has provided us our market share."

Fri, Nov 1 2013

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