“The medical marketplace has really become dominated by the large national carriers…It’s really because it’s not anywhere we feel we can compete effectively.”
Last week I received a letter from my former healthcare insurer, Guardian Life Insurance, stating that it would be getting out of the medical insurance business.
Apparently, the company made this announcement in mid-February, but is just now starting to notify its customers.
Guardian served about 1,700 companies covering 44,340 employees, which is a fairly small number in the grand scheme of things. That said, if the intention of the Patient Protection and Affordable Care Act was to spur more competition and thereby lower costs, Guardian’s exit could be a sign that the industry is moving in the opposite direction. Less competition usually results in higher long-term costs.
To be fair, it is difficult to determine if Guardian’s exiting the business resulted from Obamacare’s influence on the industry’s market dynamics, or if it was just a natural consequence of free market competition.
The only way to measure Obamacare’s impact in the near-term is if more companies start exiting the industry as Obamacare’s provisions start taking effect.
Only time will tell.