Insurance Exchanges Losing Low-Cost Plans With Departure of Big Brands

Consumers without subsidies should shop on and off health insurance exchanges for best rates


September 5, 2013 —As the health insurance industry prepares to sell plans through federal and state online marketplaces (a.k.a. exchanges) next month, many leading carriers have either decided not to offer plans on these government exchanges or to limit their participation. New HealthPocket research, analyzing the health insurance markets of 10 states, found that insurers not participating in exchanges currently have, on average, 23 percent lower premium rates than the rest of their competition. This trend was true for nine of the 10 states examined, raising questions about the level of competition within exchanges and potentially higher cost of the health plans “on exchange” in these states.


The report reviewed premium prices for a 35-year-old male in 1,621 health plans across the 10 states and was based on current 2013 data versus the plans sold in 2014 that will be restructured to comply with the Affordable Care Act (popularly known as “Obamacare.”) If a consumer is eligible for asubsidy under the exchanges, the difference in premium costs may ultimately be mitigated or even overcompensated for depending on the size of the subsidy. Yet if the report findings hold true in 2014, consumers who will not receive a subsidy must look at health plans available both on and “off exchange” to make sure they get the best pricing.


Some of the best-known health insurance brands are absent from one or more state exchanges.  The carriers include: 


·         United Healthcare (Ranked #1 by NAIC for market share)

·         Humana (Ranking #4)

·         Aetna (Ranking #5)

·         Cigna (Ranking #8)

·         Coventry (Ranking #9) (now owned by Aetna)


Most of these carriers will, however, continue to participate in state markets by offering “off exchange” products to those not seeking government subsidies.


“The individual health insurance market will change dramatically in 2014,” said Kev Coleman, head of Research at HealthPocket. “Our research shows that the exchanges will be losing some health plans that had been offering among the lowest premiums in their markets. Consumers will need to do some additional digging to make sure they evaluate all their insurance options because those highly competitive choices may only show up outside an exchange in some states.”


The analysis looked at 2013 insurance pricing and publicly reported information about insurers departing from specific states. California, Colorado, Connecticut, Georgia, Maryland, North Carolina, Oregon, South Carolina, South Dakota and Washington were included in the study. 

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