Two Obamacare exchanges see more health insurer competition

WASHINGTON Sat Feb 1, 2014 7:06am IST

U.S. President Barack Obama takes the stage to deliver remarks on the Affordable Care Act, commonly known as Obamacare, at an Organizing for Action grassroots supporter event in Washington, November 4, 2013. REUTERS/Jonathan Ernst

U.S. President Barack Obama takes the stage to deliver remarks on the Affordable Care Act, commonly known as Obamacare, at an Organizing for Action grassroots supporter event in Washington, November 4, 2013.

Credit: Reuters/Jonathan Ernst

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WASHINGTON (Reuters) - At least two U.S. states running their own Obamacare health insurance exchanges expect new insurers to enter their marketplaces and bolster competition in 2015, officials said on Friday.

Kynect, which is Kentucky's marketplace, and the Rhode Island Health Benefits Exchange have had separate talks about 2015 with health insurers that could opt to join the online marketplaces set up under President Barack Obama's healthcare reform law. Kentucky also expects an expansion of physician networks available within current plans.

Increased competition would increase consumer choices and tend to put downward pressure on health insurance cost trends. It could also help ensure the future of Obama's Affordable Care Act, which depends on the success of new online marketplaces.

Kentucky and Rhode Island are among states with the most successful Obamacare launches. Obama himself highlighted Kentucky's performance in his State of the Union address on Tuesday.

Each state also has only a small number of insurers. Kynect currently has three insurers and has enrolled more than 44,000 people in private plans since its October 1 launch. The Rhode Island exchange, with two insurers for individual consumers, has enrolled about 12,000 people.

It was not clear whether more competition would be in the offing for other states with their own exchanges or the federal government, which runs a marketplace for 36 states that have chosen not to operate their own.

"We expect our number of carriers to certainly grow and our networks to become more robust," said Audrey Haynes, a one-time aide to former President Bill Clinton who is now secretary of the Kentucky Cabinet for Health and Family Services.

Christine Ferguson, director of the Rhode Island exchange, predicted an expansion would result from insurer interest in individuals and small-business employees. "We are definitely in conversations with other carriers to come in. And I think we'll be successful with that," she said.

Both women were speaking to reporters at an event hosted by the nonprofit Robert Wood Johnson Foundation, which tracks healthcare trends.

Healthcare marketplaces, which began operating in all 50 states and the District of Columbia on January 1, allow consumers who lack coverage to purchase private health insurance, often at federally subsidized rates.

But a botched autumn launch of the federal marketplace and lagging enrollment among younger adults have raised concerns about the success of the marketplaces, with critics predicting big increases in costs down the road.

Haynes said officials in Kentucky had spoken to managed care plans owned by larger national insurance companies. "We've heard that they want to come into the market," she said.

California, which operates the nation's largest state-run healthcare exchange, has 13 insurers and has enrolled more than 625,000 people through private plans since October 1.

The state has barred new insurers from entering its marketplace in 2015, but officials say they are confident about the current roster of insurers.

"All of the plans with Covered California are really recognizing that this is a long-term play and are looking at things like benefit design, how do we improve the benefits," Peter Lee, executive director of the California exchange, told the same forum.

(Reporting by David Morgan; Editing by Tom Brown)

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