ACA insurance exchanges attract 25% more insurers

Obamacare supporters touted the good news last week when the CMS announced that at least 25% more insurers will offer plans on the federal and state exchanges for 2015.

Seventy-seven additional insurers will be participating in exchanges in the 44 states for which data are available. “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 Princeton University healthcare economist.

The CMS report looked at 36 states using the federal HealthCare.gov website and eight of the states running their own exchanges. In the federal-exchange states, there will be 57 additional insurers—a 30% increase. In four of those states—Indiana, Missouri, New Hampshire and West Virginia—the number of insurers selling plans will at least double.

Jon Kingsdale, who formerly headed the Massachusetts connector ex-change, said his state did not see as rapid an increase in insurance competition when it launched in 2007. He also noted that while New Hampshire has been trying for years to get more insurers to compete in its individual insurance market, for 2015 that state will go from one insurer to five.

In nine states the number of insurers will remain the same. California is the only state that will see a reduction in its already vigorous competition, with the number of carriers dropping from 12 to 10.

In Minnesota, PreferredOne, a provider-owned plan that captured nearly 60% of that state's exchange enrollment in 2014, announced it would not offer exchange plans for 2015.

But the new CMS data suggest that PreferredOne will be an outlier. Only 14 insurers that did business in the exchanges in 2014 won't be back for the next open enrollment, which begins Nov. 15.

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.

The increased participation of insurers for 2015 shows that they are optimistic about the viability of the exchange market, said Joel Ario, former director of HHS' Office of Health Insurance Exchanges and now a managing director at Manatt Health Solutions.

“There's probably no better sign of whether these markets have a long-term future than the level of competition,” he said. “I think (insurers) are the best judges of that.”

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