- According to preliminary data released by the Department of Health and Human Services on Tuesday, in the 36 states with federally-facilitated healthcare marketplaces and the eight states that run their own, there will be a 25% increase in the number of health insurers offering marketplace plans in 2015 over the previous year.
- Of those 36 federally-run marketplaces, four will have at least twice the number of insurers participating next year as they did in 2014. 67 insurers in the federal marketplace states and 10 in the state marketplace states will be new to the marketplaces entirely in 2015.
- Overall, the number of new entrants to the marketplaces is anticipated to be over five times the number of exiting insurers among the 44 states covered in the HHS analysis.
Not only is the sheer number of insurers entering the marketplaces set to rise, but some of the industry's biggest players are also jumping in for the first time. Once a no-show, UnitedHealthcare announced this summer that it would participate in exchanges in as many as 24 states next year, now that the risk profile of ACA enrollees has improved. Cigna and Aetna are boosting their position on the exchanges as well. All of this suggests that insurers have a better understanding of how the market works, and see it as a viable business opportunity.
Still, don't forget that not all marketplaces, especially the state-run ones, are without their risks for insurers. PreferredOne Health Insurance, Minnesota's dominant exchange insurer, recently notified the state exchange MNsure and the Minnesota Department of Commerce that it will be pulling out of the exchange market for 2015. PreferredOne has the lowest rates and the most customers on the 2014 exchange—59% of the individual market enrollees, followed by Blue Cross Blue Shield with a mere 23%—but it claimed ongoing participation in the state exchange was "not administratively and financially sustainable going forward."
What remains to be seen is the impact this increase in competition will have on premiums. Certainly, consumers now have more options to choose from, but will the increased competition contribute directly to lower premium costs as anticipated?
Want to read more? You may enjoy this story about whether increased competition will actually lower premium costs.