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Big Insurers Wary of New Obamacare Markets

Large U.S. insurers are reluctant to join new state health insurance exchanges under the federal healthcare reform law, which may impede competition when the marketplaces launch on October 1...
May 7, 2013

Large U.S. insurers are reluctant to join new state health insurance exchanges under the federal healthcare reform law, which may impede competition when the marketplaces launch on October 1. UnitedHealth, for instance, said it would participate in as few as 10 exchanges and only up to 25 maximum next year, while Aetna submitted applications to offer plans in 14 states. States like California and Washington that have strong markets, however, have received applications from dozens of insurance companies; states dominated by a single insurer may see few changes, according to health economists.

A key principle of President Obama’s health reform is that individuals will have a robust offering of insurance plans to choose from, and that competition for new customers in each state will help keep prices down for consumers. The U.S. Department of Health and Human Services, which is overseeing the exchange effort, said that it is confident the marketplace will be competitive.

The federal government has plans to run 33 exchanges, while 17 states have said that they will run their own. Last week, the government said it would give insurers three more days to file their applications for the federally-run exchanges. Also last week, Gary Cohen, the senior official overseeing the federal insurance exchanges, said 140 health insurance carriers had started the process for an application, but he did not provide details on how they were distributed by state.

Analysis: Big Insurers Wary of Obamacare (Reuters 5/2/2013)