The health insurance marketplace is expected to be an online destination where multiple insurance companies whose health plans have been pre-approved by their state and the department of Health and Human Services(HHS) are able to sell their products directly to the consumer. The hope is the exchange will follow standard economic principles of supply and demand. The higher the number of suppliers, and products the lower the cost will be overall for consumers through increased competition, price points and choices. This is a stark difference between the current state of the health insurance market place for individuals and small businesses, where one or two companies typically control a large share of the market.
According to the White house in 46 states, two health insurance companies possess at least half of the customers in their segment market, in 11 states two companies cover more than 85 percent of individuals who buy their own health insurance, In 29 states a single company has more than half of the customers, the White house memo cites 2011 data from the National Association of Insurance Commissioners,
As the numbers come in, the early signs are positive according to senior administration officials who briefed reporters at the White House on the condition they not be named or quoted according to the Huffington post. Based on memorandum released by the White House last week more than 120 health insurance companies have applied to sell coverage through federally run marketplaces under the Affordable Care Act. Additionally the Obama administration said that individuals shopping for health coverage will be able to choose from multiple products. Each health insurance company that participates in an exchange will sell an average of 15 different products in a state, according to the memo.
Heading into the October’s open enrollment period, the federal government is planning to wholly or partially operate marketplace in 34 states, while 17 states will manage their own market place. Individuals will be able to apply either through an online process, or through the use of paper applications..
Final information about coverage options and monthly premiums won’t be disclosed until the contracting process with the Department of Health and Human Services is complete in September, according to the memo. To date we have receive some preliminary information on the Marketplace in some states.
California’s premiums will be lower than expected, though some people will pay more. In Oregon, some insurers are reducing their bids to compete for customers. But in states like Rhode Island and Maryland, some insurers are seeking double-digit rate increases that they partially attribute to health care reform rules, such as mandated benefits like maternity care and prescription drugs, limitations on charging older customers higher prices, and a prohibition against excluding people or hiking their rates because they have pre-existing conditions.
WHITE HOUSE MEMO
Competition, Choice, And Affordable Coverage in TheHealth Insurance Marketplace in 2014
Some of the content of this article was obtain from an article by Jeffrey Young of the Huffingtonposts