Exchanges draw more insurers with favorable market conditions
Insurers will face tougher competition in the upcoming open enrollment period for health insurance exchanges as new entrants start selling plans on the online marketplaces, the New York Times reported.
The new entrants are drawn to exchanges this enrollment period because they have recognized the favorable market conditions.
"The increase is being driven, I believe, by insurers seeing that the volume of enrollment on the exchanges is meeting/exceeding predictions," Robert Town, University of Pennsylvania health economist, told the Times.
UnitedHealth, for example, participated in just four exchanges last year. But the largest insurer will be selling plans on 24 marketplaces come this open enrollment, FierceHealthPayer previously reported. And Cigna said it will be selling plans in three new states this year.
The markets with fewer insurers last year will experience the greatest effect of increased competition, but exchanges struggle to find ways to make their markets attractive to more insurers. Leemore Dafny of Northwestern University suggested in a paper published by the National Bureau of Economic Research that exchange officials could take steps, including offering favorable placement of new insurers' plans "in search results, on-site ads or automatic enrollment of certain individuals," according to the Times. Alternatively, exchanges could let some insurers "offer insurance on a trial basis before having to satisfy all of the standards imposed by state departments of insurance," she added.
If those steps were implemented and exchanges increased, premiums could potentially decrease, Dafny told the Times. For example, a recent study found that if UnitedHealth participated in more exchanges last year, premiums would have been 5.4 percent lower for silver exchange plans. And if all insurers sold plans on exchanges in their current markets, premiums would have fallen by 11.1 percent.
To learn more:
- read the New York Times article
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