Federal exchanges attract about 120 health plan issuers

By Allison Bell

May 30, 2013

Officials have not said how they're defining "issuer."

White House officials have given "interested parties" a peek at federal Patient Protection and Affordable Care Act (PPACA) exchange plan application results in a new memo.

The 19 states with "federally facilitated exchanges" (FFEs) have attracted applications from "over 120 issuers," officials said in the memo.

Officials did not list the issuers or say, for example, whether they are counting multiple operating companies that are owned by the same holding company separately.

Applications from carriers that want to sell medical coverage, or "qualified health plans" (QHPs), through the federal exchanges were due April 30.

PPACA calls for the U.S. Department of Health and Human Services (HHS) to set up exchanges, or Web-based health insurance supermarkets, in all 50 states and the District of Columbia by Oct. 1, 2013.

Seventeen states and the District of Columbia are setting up state-based exchanges, and 15 are working with HHS to set up "partnership exchanges."

Drafters of PPACA included a "multi-state plan" (MSP) provision that is supposed to increase the level of competition on the exchanges by requiring exchanges to make shelf space available for MSPs.

The U.S. Office of Personnel Management (OPM) would oversee the MSPs, and the MSPs could operate in more than one state.

OPM has been running an MSP bidding process but has not said anything about the results.

In the new memo, White House officials said it believes that carriers will offer MSP options in at least 31 states in 2014.

"OPM is currently reviewing over 200 proposed Multi-State qualified health plan options," officials said.

Reports from the FFEs, the state-based exchanges and the partnership exchanges suggest that about 90 percent of "target exchange enrollees" will be able to choose from plans sold by at least five carriers, officials said.

The carriers participating in the exchange program hope to offer about 15 QHPs per state, officials said.

White House officials said they believe the level of competition available through the exchange QHP menus will be much better than the level of competition consumers in many states now enjoy.

In 2012, in 11 states, the largest two issuers covered 85 percent or more of the enrollees in the individual market, officials said.

In 46 states, officials said, two insurers covered more than 50 percent of the enrollees in the individual market.

Officials are predicting that 7 million people will buy coverage through the exchange system in 2014.

About 85 percent of those people live in one of the 46 states in which two insurers now cover more than half of all individual market enrollees, officials said.

In FFE states, 75 percent of the exchanges have attracted at least one new provider of individual health coverage, officials said.

"Given market sensitivities and the fact that plan agreements are not signed until September, HHS will not release state-specific rate information until September when rates are finalized," officials said.

State regulators can help oversee exchange plans even in FFE states. State regulators in some FEE states may choose to post plan rate filing or approval information for exchange plans before September,

officials said.

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