The Invisible Hand of the Free Market Slaps "ACA = Socialized Medicine!" Claims Upside the Head, Part 10
77 new health insurance issuers means greater choice and competition for consumers
A report released today by the Department of Health and Human Services shows that consumers will have more choices as they shop for quality, affordable coverage on the Health Insurance Marketplace in 2015, because there will be a net 25 percent increase in the number of issuers offering Marketplace coverage in 2015. In total, 77 new issuers will offer Marketplace coverage.
“When consumers have more choices, we all benefit,” said Secretary Sylvia M. Burwell. “In terms of affordability, access, and quality, today’s news is very encouraging. It’s a real sign that the Affordable Care Act is working.”
Today’s report examines preliminary data from 36 states run or fully supported by the federal government (Federal Marketplace) plus eight states operating State-based Marketplaces, and finds that a larger set of insurance issuers will offer plans in the Marketplaces in 2015. Specifically:
In the 44 states for which we have data, 77 issuers will be newly offering coverage in 2015.
The Federal Marketplace states alone will have 57 more issuers in 2015; a 30 percent net increase over this year.
The eight State-based Marketplaces where data is already available will have a total of six more issuers in 2015, a ten percent net increase over this year.
Four of the 36 states in the Federal Marketplace will have at least double the number of issuers they had in 2014.
In total, 36 states of the 44 will have at least one new issuer next year. And some of the nation’s largest insurance companies will be offering coverage in more than a dozen new states, joining the hundreds of insurance companies already participating in the Marketplace.
The report’s findings are preliminary.
Today’s report demonstrates that the Marketplace is working to increase competition and lower costs for consumers. Previous estimates have found a correlation between greater competition and lower costs. Specifically, an increase of one issuer in a rating area is associated with a 4 percent decline in the second-lowest cost silver plan premium, on average. In 2014, consumers in regions with larger numbers of issuers were able to access a wider range of choices.
Here's the table showing the change in how many insurance companies are participating in each state on the exchanges in 2015 vs. 2014 (preliminary):
|District of Columbia||4||4||0||0||0|
|Minnesota (not final)||5||4||-1||-1||0|
|Total (44 states)||257||319||+62||-15||+77|
UPDATE: As pointed out in the comments below, this also means that every state will have at least 2 insurers to choose from for next year instead of a monopoly (until now, New Hampshire and West Virginia had only 1 insurer on the exchange each, and 5 other states which only had 2 choices will now have 3. Alaska and Wyoming had 2 but aren't adding any this fall.
UPDATE x2: I've updated the chart above to include preliminary numbers for Minnesota, which had 5 insurers for 2014 and is (at this point) dropping one of them (PreferredOne) for a total of 4 in 2015.