Evidence is emerging that the new healthcare reform law is failing to lower prices for many Americans living in rural areas, which was one of one of the key goals when the Affordable Care Act was passed in 2010, reports The New York Times
The problem is largely due to the fact that rural areas and small towns have far fewer carriers that are participating in the online insurance exchanges, which are designed to drive down premium costs through greater competition among insurance companies.
But the Times found that rural residents in the 34 states where the federal government is running the marketplace exchanges are having to choose from a limited and more costly number of plans being offered.
According to the newspaper's analysis of county-level data provided by the Department of Health and Human Services, 58 percent of the roughly 2,500 counties served by the federal exchanges have plans offered by just one or two insurance carriers. In about 530 counties only a single insurer is participating.
"There's nothing in the structure of the Affordable Care Act which really deals with that problem," John Holahan, a fellow at the Urban Institute, told the Times. "I think that all else being equal, premiums will clearly be higher when there's not that competition."
The lack of competition in rural areas stems in part from the fact that sparsely populated areas with fewer medical facilities are not as attractive to insurers.
That's a big problem for states like Wyoming, which has a population of fewer than 600,000.
"You've got to have some bargaining chips and we don't have that much," Wyoming Insurance Commissioner Tom Hirsig told the Times.
Even before the exchanges opened for business on Oct. 1, Mark Hillman
, a former Colorado state Senate majority leader turned farmer, wrote in his newsletter that rural areas would have trouble with Obamacare.
"Rural residents are more likely to purchase their own coverage through the individual market or to be covered by employers with less than 50 employees," Hillman said. "Individuals under 35 are now experiencing premium increases of 40% and higher.
"Others are finding that insurance plans they’ve used for years are being discontinued because politicians and bureaucrats have deemed them inadequate."
He said rural residents are also more likely to be covered by PPO plans because HMO's are rarely offered in rural areas, and under Obamacare's health insurance tax, PPO's pay double the tax charged to HMOs.
Meanwhile, many large insurers are watching what happens in the first year of Obamacare to decide whether to more aggressively pursue new markets, according to the Times. For now, problems with the Healthcare.gov website are making it difficult for them to know whether the exchanges' slow start is due to technical difficulties or a lack of consumer demand.
Christopher Ruddy: Don't Delay Obamacare
Rand Paul to Newsmax: 'Expensive' Obamacare Plans Hurt Americans
© 2014 Newsmax. All rights reserved.