Health Insurance Issuer Participation and New Entrants in the Health Insurance Marketplace in 2015

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.

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.