“Markets will be more competitive than they are now,” Mendelson said, “but not a panacea.”
Administration officials assert that consumers will have many more choices in 2014 than they have now.
“The majority of states will have new health insurance choices that are not available today,” according to the memo. The insurance reforms, coupled with premium tax credits, and premium stabilization programs, have made the marketplace an attractive option for new entrants.”
New entrants include those operating under the Multi-State Plan program, in which two carriers will be allowed to operate in all 50 marketplaces. However, no selection has been made by the U.S. Office of Personnel Management on what those carriers are yet.
Recent disclosures from some states on the number of carriers participating in their exchanges suggests the White House's take could be overly optimistic. For example, in many smaller states, such as Vermont, only two carriers are participating in the state's exchange after a nonprofit consumer oriented and operated plan, better known as a CO-OP, failed to win licensure from state regulators.
And even though states such as California have more than 10 carriers participating, many of those carriers will offer plans in only some areas, and large carriers in the state, such as two Blues plans and Kaiser, may dominate the new marketplace.
Critics of the healthcare reform law said the White House was using incomplete information in an attempt to diffuse mounting concerns about the exchanges.
“We don't even have any real data on market rates yet,” says Douglas Holtz-Eakin, president of the conservative American Action Forum, who called the memo “fantasy.” “When all is said and done, I sure hope that the reality of their marketplace beats the existing ones. Because they are throwing a trillion dollars of taxpayers' money at it.”
