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an uproar from consumers, who did not want to lose access to the two community hospitals, as well as their providers. 73 With no other option, the insurance company dropped its position and paid the higher rates. 74 Provider consolidation within a single geographic region can force payors to negotiate with a single powerful entity, allowing those entities to dictate higher prices and reimbursement. 75
C. Medical Loss Ratio Standards
The ACA’s attempt to increase and mandate access to health insurance markets has created financial burdens to health insurance companies. 76 In an effort to provide increased consumer access to the health insurance market, the ACA mandated that insurance companies cannot deny coverage to anyone with pre-existing conditions. 77 Traditionally, insurance companies had the discretion to deny consumers with pre-existing conditions access to their health plans and to charge increased premiums based on a consumer’s gender or health status. 78 The ACA’s mandate to insure individuals with pre- existing conditions causes insurers to cover sicker and more expensive
73. Id. 74. Id. 75. Pope, supra note 30; but cf. Bob Herman, Providers Fear Insurance Mergers Will Intensify Rate Pressures, MODERN HEALTHCARE (June 27, 2015) http://www.modern healthcare.com/article/20150627/MAGAZINE/306279934 [hereinafter Herman, Providers Fear] (following Dr. Robert Wergin, a family medicine physician in Nebraska, whose practice and local town’s critical-access hospital refused to sign network agreements with UnitedHealthcare because the insurer demands discounts are “too deep.”); Eric Sun & Lawrence Baker, Concentration in Orthopedic Markets Was Associated with a 7 Percent Increase In Physician Fees for Total Knee Replacement, 34 HEALTH AFF. 916, 916 (June 2015), http://content.healthaffairs.org/content/34/6/916.short (explaining a study conducted regarding concentration in orthopedic markets, drawing conclusion that “the resulting increase in market concentration also could allow larger groups to negotiate higher physician fees from private insurers.”). 76. See Anna Wilde Mathews, Health Insurers Struggle to Profit from ACA Plans, WALL STREET J. (Nov. 1, 2015, 7: 18 PM), http://www.wsj.com/articles/health-laws-strains-show- 1446423498 (noting that “[h]ealth insurers lost a total of $2.5 billion, or on average $163 per consumer enrolled, in the individual market in 2014”). 77. Patient Protection and Affordable Care Act, Pub. L. No. 111–48, § 1101(d)( 3), 124 Stat. 142 (2010) (codified as 42 U.S.C. § 18001) (determining that an individual that has a “pre-existing condition” is considered an “eligible individual”). A pre-existing condition is a health problem that a policy-holder had prior to start of the policy-holder’s new health plan coverage. Pre-Existing Conditions, U.S. DEPT. HEALTH & HUMAN SERVS., http://www.hhs. gov/healthcare/about-the-law/pre-existing-conditions/ index.html (last visited Mar. 29, 2016). Pre-existing conditions typically include expensive conditions such as asthma, diabetes, or cancer. Id. 78. How ObamaCare Affects Health Insurance Premium Rates, OBAMACARE FACTS http://obamacarefacts.com/obamacare-health-insurance-premiums/ (last visited Mar. 29, 2016) [hereinafter ObamaCare Affects Health Insurance].