More Than 120 Insurers Applied To Participate in Federal Exchanges
On Thursday, the Obama administration released preliminary data showing more than 120 insurers have applied to sell plans through federally run health insurance exchanges created under the Affordable Care Act, Reuters reports (Morgan, Reuters, 5/30).
The data included applications filed by insurers in 19 of the 33 states where the federal government will run the new exchanges, as well as recently released information from California and several other states that will run their own exchanges (Kennedy, USA Today, 5/30).
Preliminary Data Details
A White House memo released with the data said about 90% of "target enrollees" -- or about five million U.S. residents -- living in states with federally run exchanges will have at least five health insurers from which to choose (Baker, "Healthwatch," The Hill, 5/30). In contrast, HHS data show in 2012:
- One insurer covered more than 50% of the individual market in 29 states;
- Two insurers covered more than 50% of the individual market in 45 states and the District of Columbia; and
- Two insurers covered at least 85% of the individual market in 11 states (USA Today, 5/30).
The preliminary data also show insurers plan to offer an average of 15 health plans per state, with some offered in just part of a state.
The memo said, "The majority of states will have new health insurance choices that are not available today," noting about 75% of states with federally run exchanges will see at least one new insurer enter the individual market. The memo also added that 25% of insurer applicants are new to the individual market (Pear, New York Times, 5/30). However, an administration official speaking on the condition of anonymity told Reuters that some markets currently dominated by one or two insurers likely will not see significant change (Reuters, 5/30).
Administration officials also said consumers in at least 31 states will be able to enroll in multi-state plans offered by private insurers under contract with the Office of Personnel Management. Those plans will expand to all states by 2017 (New York Times, 5/30).
Overall, administration officials said the data are an early indicator of consumer choice and competition in the exchanges, which they say could help keep premium costs low, Reuters reports (Reuters, 5/30).
Reactions to Data, Administration Memo
There was mixed reaction from observers over the data, with some observers praising the increased competition in insurance markets and others questioning the veracity of the administration's claims about premium costs.
America's Health Insurance Plans spokesperson Robert Zirkelbach said, "Competition is a good thing," adding that the data are not surprising because insurers are working to provide a variety of plans at lower costs (USA Today, 5/30).
Kaiser Family Foundation Vice President Larry Levitt said that the exchanges will make it easier for smaller insurers to compete with large, nationally known brands, because their plans will be displayed side-by-side with the larger companies' plans and sorted by the cost of monthly premiums. "It definitely makes it easier for a small plan to compete," he said (Kliff, "Wonkblog," Washington Post, 5/30).
However, some health policy experts cautioned that competition alone will not guarantee lower prices or make it easier for consumers, Reuters reports.
Arthur Kellermann of RAND Health said that although it is important to have enough plans to provide consumers with choices and promote competition, "having a zillion plans to pick from may be bewildering for people coming into a market they're not that familiar with" (Reuters, 5/30).
Caroline Pearson, vice president for health reform at Avalere Health, said, "I would characterize it as modest plan competition." She added, "In most markets, there seems to be a bit more choice than whatâs available in the market today. But weâre certainly not seeing a wild influx of plans into the market" ("Wonkblog," Washington Post, 5/30).
Meanwhile, other experts said the application process was just the beginning of establishing the marketplaces. They noted that after looking over the applications, federal officials could ask insurers to increase their plans' benefits or lower their premiums, as well as expand their proposed physician and hospital networks (New York Times, 5/30).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.