July 12, 2013 -- There will be a high level of competition in many states’ health insurance exchanges, according to a new report from the Robert Wood Johnson Foundation. The report’s authors from the Urban Institute and Georgetown University’s Health Policy Institute note that the competitive nature of the exchanges will lead to reasonably priced premiums for consumers purchasing individual coverage in the new marketplaces.
The report finds that the competitive environment will result in lower-than-expected premiums for individuals who do not qualify for subsidies in the exchange, under the Affordable Care Act, as well as lower costs to the federal government for exchange shoppers who do.
The authors cite several factors leading to the high level of plan competition, including states incentivizing multiple insurers to participate and generally letting the resulting competitive market determine rates rather than negotiating premiums.
“For insurance exchanges to truly benefit consumers’ pocketbooks, there needs to be adequate competition among participating insurers to keep prices reasonable,” said Andy Hyman, who leads coverage programs at the Robert Wood Johnson Foundation. “Fortunately, the early tea leaves suggest that insurers are eager to participate by providing high-quality, reasonably priced plans in the new insurance marketplaces.”
The report’s findings are culled from an analysis of six states – Colorado, Maryland, New York, Oregon, Rhode Island and Virginia.
You can access the full report here.
