By David Morgan
WASHINGTON May 30 The White House, seeking to
show early success for President Barack Obama's health reforms,
said more than 120 insurers have applied to sell plans on
federally-run online marketplaces that begin offering
subsidized coverage in just over four months.
Based on a memo released by senior administration officials,
about 5 million consumers could be able to choose from a variety
of plans from at least five insurance companies with coverage
that meets new quality standards set down by the 2010 Patient
Protection and Affordable Care Act.
Each insurance company applicant would offer 15 separate
plans on average.
The administration did not provide a state-by-state
breakdown. Officials, who spoke on condition of anonymity, said
some markets now dominated by one or two insurers may not see
The data was described as preliminary but officials said it
was encouraging as an early indicator of consumer choice and
competition that could help restrain health insurance costs and
help some avoid the sticker shock that Republicans and some
analysts have predicted.
Healthcare analysts cautioned that competition alone would
not guarantee affordable rates or convenience.
Dr. Arthur Kellermann of RAND Health said it was important
to have enough plans to provide choices and promote competition.
But "having a zillion plans to pick from may be bewildering for
people coming into a market they're not that familiar with."
The Obama health plan is under political pressure from
skeptical Republicans as well as Democratic lawmakers worried
that a troubled rollout could hurt their chances in the 2014
The state marketplaces are expected to attract 7 million
enrollees beginning Oct. 1. The markets, or exchanges, are seen
as the linchpin for the law's package of sweeping reforms.
The data in the memo is based on insurer applications to
sell plans in 19 states, including the huge markets of Texas and
Florida, where the administration is setting up federal markets.
Data also comes from states including California that have
released data on their own marketplaces. All these states
account for some 80 percent of anticipated enrollees, or about
5.6 million people.
All told, the administration will run exchanges in 33 states
and provide substantial support in two others. Fifteen states
and the District of Columbia are working to establish their own
marketplaces. All exchanges are slated to begin operating on
Jan. 1, when the reform law comes into full force.
Some analysts have forecast rate increases of 30 percent or
more for the exchanges, which will offer individuals and small
groups greater coverage levels with a broader range of benefits
than are often available in today's marketplace.
A report issued on Thursday said rate hikes of up to 60
percent could occur in states with federal exchanges. The report
was released by Center Forward, a Washington coalition led by
former Democratic Representative Bud Cramer that aims to find
common ground between Republicans and Democrats in Congress.
The administration will not release cost data for the
federal exchanges until September. But officials said the level
of participation so far could suggest enough competition to
restrain cost growth and pointed to preliminary forecasts for
state-run exchanges in California, Oregon and Washington that
suggest lower-than-expected costs.
In any case, by purchasing coverage through the
marketplaces, consumers with low-to-moderate wages can qualify
for federal subsidies that would limit their insurance premiums
to somewhere between 2 percent and 9.5 percent of annual income.
The White House memo said three-quarters of states with
federal exchanges would see at least one new insurer enter the
market with plans for individual coverage.
One in four insurance company applicants are new to the
individual market, and about two-thirds of new entrants are
looking at states that today have one dominant insurer.
New insurers include state cooperative plans set up in 6
states with the help of federal loans, according to separate
market data. The states are Arizona, Louisiana, New Jersey,
South Carolina, Tennessee and Wisconsin.
The administration also said it will offer multi-state plans
in at least 31 states in 2014, with coverage expanding to all 50
states and the District of Columbia no later than 2017.