Administration Touts Competition In Insurance Exchanges

By Julie Rovner

Published May 30, 2013 at 5:28 PM EDT

The Obama administration is countering criticism that the new health insurance exchanges will be lacking in competition, though it's doing so a bit quietly.

At a White House briefing Thursday for health reporters, in which senior administration health officials spoke on the condition that they not be named, and in a memo, the administration insisted that in most states at least, competition will be far greater than it is today — with 120 companies having applied to offer insurance.

For example, in three-quarters of the states where the federal government is running the marketplaces, at least one new insurer has applied to enter the individual market. And nearly two-thirds of the new insurance entrants to the individual market in federally run exchanges are in states where one insurance company now dominates the market.

The officials stressed how much better competition will be than it is in the current market for individual coverage. In 2012, one insurer covered more than half of all people in the individual market in 29 states. In 11 more states, two insurers covered 85 percent or more of the individual market enrollees.

The federal government will be fully in charge of the exchanges in 19 states. It will partner with states in 15 states. The remaining 17 states will run their own marketplaces.

"We're very encouraged," one senior official said, that there will be "products on the shelves" when the marketplaces open for enrollment on October 1.

The officials also provided the first preview of something that has gotten relatively little notice so far: Multistate plans that are overseen by the Office of Personnel Management. That task was given to OPM because it oversees the Federal Employee Health Benefits Plan, which covers more than 8 million federal workers, including many plans that offer coverage nationwide.

Under the health law, at least two multistate plans are supposed to be offered nationwide in order to boost competition by 2017. OPM officials said they are reviewing more than 200 proposals so far and they expect multistate plans to be offered in at least 31 states in 2014. Multistate plans will be available to both individuals and small businesses, officials said.