Health Insurance Marketplace Will Generally Provide Five+ Coverage Options for 2014

In a memo released by the White House on May 30, 2013, administration officials described the competition and choices that will likely be available for individual consumers under the Health Insurance Marketplace, mandated by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). If these estimates hold true, a dramatic increase in choices will be available to individuals when enrollment begins on October 1, 2013, and more than 120 insurers have applied at this time to offer health plans in the individual marketplace.

Current Insurance Market

Statistics were provided in the memo regarding the number of health insurers available throughout the country. In 2012, state individual insurance markets were dominated by one or two companies, with 11 states seeing two insurers covering 85 percent of the individual market, while 29 states had one insurer covering over 50 percent of enrollees. Forty-six states had two insurers covering more than half of all enrollees, and those 46 states have 85 percent of the 7 million people that are estimated to enroll in the marketplace in 2014.

The Exchanges

According to the memo, 17 states, including the District of Columbia, plan to run their own exchanges. In all of the remaining states, HHS will be involved in running the exchange—19 states are having HHS run the exchanges entirely, and in 15 states, the exchanges will be a joint effort between the state and HHS. The Office of Personnel Management (OPM) will also operate multi-state plans, which will eventually provide more options that are available in all states. In 2014, multi-state plans will be offered in at least 31 states.

In 75 percent of states with an HHS-operated exchange, at least one new insurer plans to enter the individual marketplace in the state. Further, 65 percent of new insurers in HHS-run exchanges will be in states where one company currently controls the market. Ninety percent of those thought to be enrolling in the marketplace will have five or more insurance companies to choose from when enrolling, and consumers will have multiple options with regard to tiers of coverage.