Health law drawing interest

Insurance firms lining up to compete in state exchanges

WASHINGTON - Insurance companies are showing interest in providing coverage under the new health-care law, a development likely to increase market competition and give uninsured people more choices, the White House said Thursday. Many of the 14 million people who currently buy their own insurance plans could also benefit.

Eager to counter Republican criticism of the law, the White House’s upbeat assessment comes four months before consumers can begin shopping for subsidized private insurance in new state markets. Widespread enrollment in those plans is crucial to the successful implementation of President Barack Obama’s 2010 health-care law.

On its website, the White House posted a memorandum that concluded that most of the consumers who seek insurance from federal- or state-run insurance markets will be able to choose from five or more insurance companies. The finding is based on data provided by 19 states where the federal government will run the markets and from other state-run markets. Those states account for about 80 percent of the 7 million people that the Congressional Budget Office estimates will obtain insurance through the new markets in 2014.

Currently, the insurance market in most states is dominated by one or two insurance carriers; in 45 states and the District of Columbia, two insurers cover more than half of all enrollees.

The administration’s findings about increased competition generally match up with private sector assessments of early indicators. The market research firm Avalere Health found strong insurer interest in participating in about a dozen states that have released details of their new insurance markets.

Whether the competition will result in lower premiums, however, remains an open question.

Administration officials point to a report by the Democratic staff of the House Energy and Commerce Committee last week that determined that in Oregon and Washington, the competition is lowering premiums even before income-based tax credits are taken into account. But two other states whose filings were examined by the committee, Rhode Island and Maryland, signaled increases in premiums.

An earlier report by the committee’s Republican staff surveyed insurers who estimated that premiums would increase in most cases.

Concerns remain that people who already have insurance coverage, especially the young and healthy, could face an increase in premiums because of the new law’s demands. The plans that will be offered next year are more comprehensive than many bare-bones policies currently available to individuals.

They have to cover a standard set of benefits, including prescription drugs, maternity care and rehabilitation services. Insurers are also limited in what they can charge older customers, and they are not allowed to turn away sick people or charge them more. The most important cost feature is that the new plans limit co-payments and other out-of-pocket costs to $6,400 a year for individuals and $12,500 for families.

Meanwhile Congress’ watchdog, the Government Accountability Office, examined the preparations in six states and the District of Columbia and concluded that despite challenges, the seven governments have taken steps to create their insurance marketplaces, or exchanges, that they expect will be ready to begin enrolling customers by the Oct 1 start up date.

Information for this article was contributed by Ricardo Alonso-Zaldivar of The Associated Press.

Front Section, Pages 8 on 05/31/2013

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