Insurers flocking to ObamaCare

The Hill
June 5, 2014

By Elise Viebeck

Health insurance companies suddenly want in on the ObamaCare action.

With a difficult launch year out of the way, insurers are seeing a moneymaking opportunity in the federal healthcare program and are lining up to offer plans on the ObamaCare exchanges in 2015.

In the 10 states where data is available, at least 27 new insurers have indicated they will offer plans on the marketplaces in 2015. Each additional carrier will expand the number of plans sold on the exchanges, since none of the carriers already offering plans have indicated they will drop out.

The surge in participation is being touted by the White House, and indicates that many of the ObamaCare exchanges are taking root despite the broader unpopularity of the law and opposition from Republicans on Capitol Hill.

Healthcare experts, who had long predicted that more insurers would join ObamaCare in the second year, say major players in the industry can’t afford to stay on the sidelines after more than 8 million people signed up for coverage in 2014.

“This is a very positive sign for the exchanges,” said Avalere Health President and CEO Dan Mendelson. “Companies that made a heavy initial investment, like Wellpoint, are staying in, and their more cautious competitors, like UnitedHealthcare, are now entering.”

More competition on the exchanges could put downward pressure on prices and drive down the benchmark price for premium subsidies.

The trend of insurers joining the exchanges is happening in regions across the United States.

So far, Michigan’s exchange will see the biggest increase, with five insurers planning to join. New Hampshire, Indiana, Ohio and Washington state will all see four new carriers each. In Illinois and Maryland, two companies are jumping in. And Kentucky and Connecticut will see their numbers rise by at least one insurer.

Cover Oregon is one exchange that will not expand its participation, but that is by design: the state entered into two-year contracts with insurers last year and will not accept new entrants for 2015.

News of increased participation has trickled out along with proposed premium rates, which must be approved by state regulators in most cases. While some insurers are hoping to enact double-digit price increases next year, others have proposed to cut their rates.

The White House has been eager to highlight insurers’ interest in the exchanges, which run counter to predictions from some ObamaCare opponents that carriers would flee the marketplaces after the program’s first year.

Deputy Press Secretary Eric Schultz this week out a series of positive headlines for the law.

“News that new health insurers are joining the marketplaces is a another sign that the health care law is helping to drive competition and provide quality, affordable, health insurance options to millions of Americans,” said White House assistant press secretary Jessica Santillo in a statement.

But Republicans are calling the praise premature and are blaming the media for declaring the developments positive for ObamaCare.

Additional insurance carriers “doesn’t change the fundamental flaws in the law — higher costs, wasted taxpayer dollars and Americans losing access to the care they like and want,” said Republican National Committee spokeswoman Kirsten Kukowski. “The White House shouldn’t be spiking the football when so many are clearly unhappy.”

Republicans say they remain confident that ObamaCare will be a liability for Democrats in the midterm elections, and plan to use the law against vulnerable Senate Democrats as they seek to win back the majority.

“For months reporters have been pointing out what they perceive as ‘pretty good news for the White House and ObamaCare,’ yet Obama’s numbers are at an all-time low and ObamaCare’s numbers are the exact same as they were on Election Day 2010,” said National Republican Senatorial Campaign Committee spokeswoman Brook Hougesen.

“Maybe, just maybe, the main stream media’s opinion is off on what Americans perceive as ‘pretty good news.’ ”

Rising insurer interest in the exchange could accelerate what many experts believe will be a slow but pronounced shift away from obtaining health insurance through employers under ObamaCare.

Several prominent companies such Home Depot and Trader Joe’s have already made moves to stop coverage for part-time employees and move them onto the federal marketplaces.

Under the emerging model, employees would receive a “defined contribution” to pick a plan on the exchange.

Employers could still face penalties under ObamaCare if they fail to cover full-time workers, but some advocates say the fines will be cheaper than offering health plans.

“It will definitively be less expensive to pay penalties than to provide coverage,” National Retail Federation vice president Neil Trautwein told The Hill last November.

“That said, the decision is a little more complex than dollars and cents. … The same impulse that drove us to offer coverage in the first place in order to attract good workers is still there,” he said.

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