Health Insurance Marketplace Forecasts 25% Growth In 2015
By Christine Kern, contributing writer
Insurers vying for Obamacare business signals healthy exchange markets.
There will be more insurers competing for consumers’ business on the healthcare exchanges during the second year of Obamacare enrollment, CMS announced. The number of insurers selling products on the state and federal exchanges will increase by at least 25 percent in 2015 as 77 new insurers will offer Marketplace coverage.
In 36 of the 44 states, there will be at least one new insurer seeking customers through the government-run marketplaces. “When consumers have more choices, we all benefit,” said Secretary Sylvia M. Burwell. “In terms of affordability, access, and quality, today’s news is very encouraging. It’s a real sign that the Affordable Care Act is working.”
“To me it shows that the ACA is alive and well and that somehow God didn’t listen to the prayers from the critics,” said Uwe Reinhardt, a healthcare economist at Princeton University. “God seems biased in favor of the ACA.”
The report examines preliminary data from the 36 states run or fully supported by the federal government (Federal Marketplace) plus eight states operating State-based Marketplaces, and finds that a larger set of insurance issuers will offer plans in the Marketplaces in 2015. Specifically:
- In those 44 states, 77 issuers will be newly offering coverage in 2015.
- The 36 Federal Marketplace states will have 57 more issuers in 2015; a 30 percent net increase over this year.
- The eight State-based Marketplaces will have a total of six more issuers in 2015, a ten percent net increase over this year.
- Four of the 36 states in the Federal Marketplace will have at least double the number of issuers they had in 2014.
- In total, 36 states of the 44 will have at least one new issuer next year. And some of the nation’s largest insurance companies will be offering coverage in more than a dozen new states, joining the hundreds of insurance companies already participating in the Marketplace.
In nine states the number of insurers will remain the same. California is the only state that will see a reduction in competition, with the number of companies dropping from 12 to 10.
Although the report’s findings are preliminary, they demonstrate that the Marketplace is working to increase competition and lower costs for consumers. Previous estimates have found a correlation between greater competition and lower costs. Specifically, an increase of one issuer in a rating area is associated with a 4 percent decline in the second-lowest cost silver plan premium, on average. In 2014, consumers in regions with larger numbers of issuers were able to access a wider range of choices.
UnitedHealthcare, the country’s largest insurer in terms of lives covered, is significantly ramping up its exchange participation for 2015. The company plans to compete in two dozen exchanges, more than doubling its participation.
“There’s probably no better sign of whether these markets have a long-term future than the level of competition” among health insurers, said Joel Ario, a former director of HHS' Office of Health Insurance Exchanges who’s now a managing director at Manatt Health Solutions. “I think they’re the best judges of that.”
The report can be accessed here.