Joel Ario Discusses State Health Exchange Competition with Modern Healthcare
"Less Is More?"
Modern Healthcare
May 4, 2013 - Manatt's Joel Ario, a managing director with Manatt Health Solutions, spoke to Modern Healthcare about the varying levels of competition among health insurers to offer plans on states' online exchanges.
Modern Healthcare reports that states are beginning to gauge how many choices they'll offer consumers this fall when online health insurance marketplaces open. The early numbers suggest that competition may not be as robust as intended. Illinois, for example, announced that six carriers have applied to offer 165 qualified health plans on its exchange, which is far fewer than officials originally projected. California has received expressions of interest in participating in its marketplace from 33 carriers, while in Vermont, only two carriers have so far submitted applications and rates for exchange plans.
But just how competitive each state's exchange will be will vary state by state, according to Ario, who said that greater competition among carriers is likely to be seen in larger states, rather than smaller ones, which are dominated by a few carriers.
The exchanges may change that dynamic, Ario said. "In smaller states, the exchange has lowered barriers to entry for (a carrier) looking to break into a smaller market," Ario said. However, he added, in 2014 many smaller insurers will wait to see how the exchanges perform, delaying entry until 2015 or 2016. Ario also sees a role for consumer-oriented and -operated plans, better known as CO-OPs, in exchanges, even though the remaining $1.4 billion in federal funding for the $6 billion program was cut in January as part of a deal to avoid the fiscal cliff. "They're going to get (more) attention than their size would otherwise warrant."