Carriers flock to PPACA federal exchanges
By Kathryn Mayer
More than 120 health insurance plans have applied to sell their products on the federally run health insurance exchanges under the Patient Protection and Affordable Care Act, the White House said in memo Thursday.
One-quarter of those applicants are new competitors in a state’s individual insurance market.
In the 19 states where the federal government is running the exchange, about 90 percent of so-called “target enrollees” will have at least five insurance companies to choose from, the White House said.
Currently, in most states the individual insurance market is dominated by one or two insurance companies. But the administration claims that’s set to change next year under PPACA.
Officials are predicting that 7 million people will buy coverage through the exchange system in 2014.
About 85 percent of those people live in one of the 46 states in which two insurers now cover more than half of all individual market enrollees, officials said.
Eager to counter Republican criticism of the law, the White House's upbeat assessment of the effect of the law comes four months before consumers can begin shopping for subsidized private insurance in new state markets. Widespread enrollment in those plans is crucial to the successful implementation of President Obama's 2010 health care law.
The administration's findings about increased competition generally match up with private sector assessments of early indicators. The market research firm Avalere Health found strong insurer interest in participating in about a dozen states that have released details of their new insurance markets.
Whether the competition will result in lower premiums, however, remains an open question. Administration officials point to a report by the Democratic staff of the House Energy and Commerce Committee last week that determined that in Oregon and Washington the competition is lowering premium rates even before income-based tax credits are taken into account. But two other states whose filings were examined by the committee, Rhode Island and Maryland, signaled premium rate increases.
An earlier report by the committee's Republican staff surveyed insurers who estimated that premiums would increase in most cases.
Indeed, concerns remain that people who already have insurance coverage, especially the young and healthy, could face an increase in premiums because of the new law's demands. The plans that will be offered next year are more comprehensive than many bare-bones policies currently available to individuals.
They have to cover a standard set of benefits, including prescription drugs, maternity care and rehabilitation services. Insurers are also limited in what they can charge older customers, and they are not allowed to turn away sick people or charge them more. The most important cost feature is that the new plans limit copayments and other out-of-pocket costs to $6,400 a year for individuals and $12,500 for families.
A new report by Center Forward, a bipartisan research group, concluded that differences in current state regulations will determine the effect on premiums. Of six states it examined, the report determined that five would see sharp premium increases of up to 50 or 60 percent. One state, New Jersey, could see a drop in premiums of up to 25 percent.
People without access to coverage through their jobs can start shopping on Oct. 1 for subsidized private insurance in new state markets. The actual benefits begin Jan. 1. But because of continuing opposition to the law from many Republican governors and state legislators, the federal government will be running the insurance markets in more than half the states.
Originally published on BenefitsPro.com