By Munira Z. Gunja and Emily R. Gee
A central feature of the Affordable Care Act is the establishment of the Health Insurance Marketplace (“Marketplace”). The Marketplace offers consumers a transparent and competitive platform to shop for health insurance coverage, apply for financial assistance, and purchase coverage without any medical underwriting or special premium adjustment based on pre-existing conditions.1 Based on preliminary data available for 44 states, there will be 77 issuers offering Qualified Health Plans (QHPs) through the State-based and Federally-facilitated Marketplaces (also known as Marketplace plans) for the first time in 2015, and 36 of the 44 states will have at least one new Marketplace entrant. In these 44 states, there will be 63 more issuers offering Marketplace plans in 2015 than there were in 2014. This represents a 25 percent increase in the total number of issuers offering Marketplace plans between 2014 and 2015.
- Based on preliminary data for 36 Federally-facilitated Marketplace (FFM)2 states and eight additional State-based Marketplace (SBM) states, there will be a 25 percent increase in the number of health insurance issuers offering Marketplace coverage in 2015 compared to 2014.
- Four of the 36 states in the FFM will have at least double the number of issuers they had in 2014.
- At least 67 issuers in the FFM and 10 issuers in the SBMs will be new to the Marketplaces in 2015.
- Some of the nation’s largest insurers will be offering coverage for the first time in more than a dozen states, suggesting that the FFM and SBMs represent an increasingly attractive business opportunity
- Ten issuers in the FFM and four issuers in the SBMs that offered QHPs in a given state in 2014 have not filed for participation in 2015; however, some of those issuers’ parent companies continue to be active in the respective states’ Marketplaces.
- Given that the number of new entrants is expected to be more than five times the number of exiting issuers among the 44 states included in this analysis, the Marketplaces will offer consumers significantly more choice in 2015 and appear to offer an increasingly attractive business opportunity for issuers.
Consumers who are shopping for Marketplace plans will be able to choose from among a significantly larger set of insurance issuers for 2015 than were available for 2014.3 Market entry results in more sellers while typically driving issuers to compete more aggressively on price and quality.4 This, in turn, offers consumers better value and more opportunity to pick the plan that best meets their needs.
1 This brief considers only individual market Qualified Health Plan (QHP) issuers, and not SHOP or stand-alone dental plan (SADP) issuers. SADPs offered through the Marketplace may still underwrite and adjust premiums.
2 For the purposes of this analysis, we refer to 36 states collectively as the Federally-facilitated Marketplace. These 36 states include 27 states that have Marketplaces fully run by the federal government, 7 that have State Partnership Marketplaces, and 2 that have federally supported State-based Marketplaces in 2014.
3 ASPE estimated that for 2014, 82 percent of people eligible to purchase a qualified health plan lived in rating areas with at least three issuers in the Marketplace, and 96 percent lived in areas with at least two issuers. For more information, see http://aspe.hhs.gov/health/reports/2014/Premiums/2014MktPlacePremBrf.pdf.
4 For example, an ASPE analysis found that in 2014, “Competition, as measured by the number of issuers in a rating area, [was] associated with more affordable benchmark plans (the second-lowest cost silver plan) for individuals and reduced costs for the federal government,” see http://aspe.hhs.gov/health/reports/2014/Premiums/2014MktPlacePremBrf.pdf.