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More health insurers to vie on federal exchange

Wednesday, Aug. 6, 2014, 10:45 p.m.
 

Competition among health insurers will increase next year in Pennsylvania as the nation's largest carrier vies for customers on the federal exchange set up in the state under the Affordable Care Act.

United Healthcare will offer health plans for individuals in the Pittsburgh and Philadelphia regions on HealthCare.gov when open enrollment begins in three months, the company said on Wednesday. The insurer did not sell policies in the state this year on the exchange.

“In many areas of the country, more insurers are coming in (to the exchanges) and very few insurers are leaving,” said Larry Levitt, an insurance market expert at Kaiser Family Foundation, a California-based nonprofit research organization. “I think it reflects the fact that the insurers see the market as largely stable at this point.”

While four insurers will compete for subscribers on the exchange in Pittsburgh — up from three in the last enrollment period — it is unclear what that will mean for prices. State and federal officials are reviewing rate plans and said no announcement will be made before October.

Rates are rising on state-run exchanges and in the federal marketplace where prices have been disclosed. Among 27 states and the District of Columbia that have released data on premiums for 2015, the average hike will be 7.5 percent, according to an analysis by Pricewater­houseCoopers.

The size of the increases vary widely. In California, for example, the organization running the state's online marketplace said premiums would rise 4.2 percent on average. State insurance regulators in Florida said this week that premiums there would jump an average 13.2 percent.

Levitt said that while many insurers are raising premiums, most are modest and not likely high enough to persuade subscribers to drop coverage.

“We've yet to see a state where the worst fears have been realized,” he said. “I don't think it's likely that the rate increases will chase consumers away.”

Premiums for plans sold on the exchange in Pennsylvania won't be known until at least Oct. 14, the earliest date in which details will be finalized between the federal government and insurers. Pennsylvania officials declined to set up their own exchange and are relying on the Department of Health and Human Services for the online marketplace.

United officials declined to discuss premiums or other details of the plans they will offer in the state. In a written statement to the Tribune-Review, Dan Tropeano, United's executive director of the Pennsylvania market, said: “We expect to offer a range of quality, innovative products that offer great value, access and service.”

United CEO Stephen Hemsley told analysts last month that the company will expand its exchange participation to at least 24 states, up from four, because “we believe there will likely be meaningful membership activity in the market after the initial experience of this year and as second-year pricing is presented.”

At the time, Hemsley did not identify specific states where United would offer plans.

About 8 million Americans signed up for health coverage in the six-month enrollment period that ended March 31. An estimated 42 million people in the country are uninsured. The penalty for lacking coverage, which was $95 per person this year, rises to $325 in 2015.

Meanwhile, the three carriers that participated in the last enrollment period in Western Pennsylvania — Highmark Inc., UPMC Health Plan and Aetna Inc.'s HealthAmerica subsidiary — said they will continue to sell coverage for 2015. All declined to discuss changes to premiums.

Highmark, the state's largest health insurer, was the dominant carrier on HealthCare.gov in Pennsylvania. The nonprofit Blue Cross Blue Shield company signed up more than 130,000 people, or 41 percent of the statewide sign-up total of 318,000.

In Western Pennsylvania, Highmark's premiums were significantly lower than those offered by UPMC or HealthAmerica. PricewaterhouseCoopers found that Blue Cross Blue Shield plans across the country have submitted rate-increase requests of more than 9 percent for 2015. Highmark is a Blue Cross Blue Shield provider.

Open enrollment on HealthCare.gov starts Nov. 15 and is expected to last for three months.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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