Experts: Exchange Increased Competition in Calif. Insurance Market

Health insurance experts say Covered California has increased competition in the insurance market, even though four insurers accounted for the majority of exchange enrollments across the state, Modern Healthcare reports (Demko, Modern Healthcare, 4/22).

Background

Nearly 1.4 million state residents signed up for private health coverage during the exchange's first open enrollment period, which ended April 15, according to exchange officials.

Among insurers participating in the exchange:

• Anthem Blue Cross gained more than 425,000 new members, accounting for 30% of enrollees in private plans;
• Blue Shield of California gained more than 381,000 new members, accounting for 27% of enrollees in private plans;
• Health Net gained more than 264,000 new members, accounting for 19% of enrollees in private plans; and
• Kaiser Permanente gained more than 241,000 new members, accounting for 17% of enrollees in private plans (California Healthline, 4/18).

Experts Say Competition Increased

While the four large insurers accounted for 95% of Covered California enrollees statewide, experts note that many exchange plans that had fewer new enrollees only offered plans in certain areas of the state. For instance, the Chinese Community Health Plan was marketed exclusively in the San Francisco area and had about 13,000 enrollments.

Dylan Roby, a professor at UCLA's Center for Health Policy Research, said, "In the past, the individual market was really run by Anthem and Kaiser," but Covered California gave smaller insurers the opportunity "to jump into the market and see what they could do."

However, Glenn Melnick -- a health care finance expert at the University of Southern California -- said there is not yet enough data to know how sustainable the exchange market will be in the coming years.

According to Covered California Executive Director Peter Lee, all 11 insurers currently offering plans through the exchange have said they plan to participate in the exchange during the 2014-2015 open enrollment period (Modern Healthcare, 4/22).

Expert Says Covered Calif. Premiums Unlikely To Increase

In related news, Gerald Kominski, a health policy expert at the Center for Health Policy Research, said that he does not expect rates on exchange plans to increase significantly during the next open enrollment period, the Ventura County Star reports.

Kominski noted that the majority of Covered California consumers enrolled in bronze- or silver-level plans, both of which tend to reduce health care use because of their relatively high deductibles. Specifically:

• About 26% of exchange enrollees purchased bronze-level plans, with a deductible of $5,000; and
• About 62% of exchange enrollees selected sliver-level plans, with a deductible of $2,000.