Uninsured and self-insured residents in Pennsylvania may have several plans to choose from in a new online marketplace, or health exchange, this fall.
State insurance officials have given the OK to proposals from eight insurance companies, though it’s still unclear how this level of participation will affect plans’ prices and quality.
Sign-up for such plans through new online marketplaces in Pennsylvania and elsewhere starts in October, as part of the federal health law. Those with low and moderate incomes will be eligible for tax credits to make buying a plan more affordable.
They'll have a choice between different levels of coverage, but all plans must include certain benefits that weren't always covered in the past.
The federal government is running Pennsylvania’s marketplace because state leaders declined to take the lead. Even so, Melissa Fox, a spokeswoman with the state insurance department, says all plans sold in the state have to first go through her office.
“Any health insurance company that we regulate is required to submit their rate and what are called policy forms to us for review and approval,” says Fox. Additionally, for least for the first two years, the plans will have to include any state specific mandates. The state will also be responsible for dealing with people’s claims denials.
Fox says the state has given the go-ahead to 15 groups, through some are subsidiaries of the same company. Cigna and United Health Care are not participating. The plans now go to health officials in Washington, who ultimately will decide which plans will be approved.
Neither the department nor federal officials are releasing any more details about the plans, but Martin Gaynor, a health economist at Carnegie Melon University, says the fact that several companies want to participate in Pennsylvania’s marketplace is a good sign.
“Having more plans will give people choices and hopefully will create some vigorous competition among health plans, which will tend to drive down the premiums people have to pay and make them better off,” says Gaynor.
Mark Pauly, a health economist at the Wharton School of the University of Pennsylvania, says it’s important that the major insurance players in the state are willing to participate.
“Some other states wonder if anybody will show up at the party, but in Pennsylvania there will be some guests,” says Pauly.
Pauly says the number of companies wanting to be part of Pennsylvania’s exchange appears to mirror the current market competition. Still, Gaynor says, the real success will come down more than the number of plans that are available. A lot will rest on which plans, in particular, are available and what they cover.
"If you have, for example, a market with many, many plans but it's really dominated by one health insurer that everybody wants, then you could have a thousand plans. But if the market is really dominated by one health insurer, then you won't have effective competition," says Gaynor.
The federal government will have more specifics about the plans in September and October.
At least four companies have submitted proposals to participate in New Jersey’s exchange, as well as three in Delaware.
Companies which filed health products in Pennsylvania*
Aetna Health Ins. Co.
Aetna Life Ins. Co.
Capital Advantage Assurance Company
Capital Advantage Insurance Company
First Priority Life Ins. Co.
Geisinger Health Plan
Geisinger Quality Options
HM Health Ins. Co.
Keystone Health Plan Central
Keystone Health Plan East
QCC Ins. Co.
UPMC Health Network
UPMC Healthplan Inc
*Source: Pennsylvania Department of Insurance