Apr 26 2014, 9:16am CDT | by Forbes
News that more than 8 million Americans signed up for private health benefits under the Affordable Care Act is drawing health insurance companies to more markets in 2015 and could mean better prices and choices for consumers, analysts say.
Already, the nation’s largest health insurance company, UnitedHealth Group (UNH), last week said it is looking to expand next year. Meanwhile, other health plans including Aetna (AET), Humana (HUM), Wellpoint (WLP) and Blue Cross and Blue Shield plans are evaluating their markets and rates for 2015.
“We had a very modest footprint in 2014 and as we’ve said and still believe, we do have a bias to increase that participation in 2015,” Gail Boudreaux, executive vice president and CEO of UnitedHealth’s United Healthcare subsidiary.
Though UnitedHealth isn’t saying where it will expand, health benefits analysts say increased insurance company participation on the exchanges is good news for consumer choices and health plan pricing.
“null rincipal in the health and life sciences practice of consulting firm Oliver Wyman. “ Oliver Wyman has benchmarked the competitiveness of on-exchange premiums by comparing actual premiums in each state with an expected premium based on actuarial projections. In many states, the lowest cost plans are well below what we would expect.”
Aetna CEO Mark Bertolini earlier this week told Wall Street analysts and investors on the company’s first-quarter earnings call that the company is evaluating rates for 2015 for the 17 states where it offers products on public exchanges. Markets with higher numbers of health plan members tend to have lower rates but anything still has to be approved by state or federal regulators.
“I would say the range of our rates are very low single digits to some that will be over double digits, and in large part that depends on number one, the amount of membership we have in the market; number two, the demographics of that membership, but probably even more importantly the lack of clarity about what kind of experience we have,” Bertolini told analysts earlier this week.
But benefits analysts say selling benefits on an exchange is beginning to increase competition and reduce costs.
“The overall goal of a health exchange is to create a competitive marketplace that offers consumers a variety of high quality health plans to meet their individual needs,” said Cary Grace, CEO of Aon Exchange Solutions, a private exchange offered to employers by benefits consulting firm Aon Hewitt (AON). “Adding new carriers that understand the local competitive environment and the buying preferences of the consumers in that local market will help to increase this outcome.”
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