Number of Obamacare insurers to rise by 25% in 2015

Obamacare's store is going to be a bit more crowded this year.

The number of insurers set to sell health plans on Obamacare exchanges in the upcoming open-enrollment period is 25 percent higher than for 2014, as 77 issuers jump into that market, federal officials revealed Tuesday.

Health and Human Services Secretary Sylvia Burwell said the boost in insurers willing to sell the new form of health insurance starting Nov. 15 is "a real sign that the Affordable Care Act is working."

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"When consumers have more choices, we all benefit," said Burwell, who announced the expansion in the number of insurers selling Obamacare plans during a speech at the Brookings Institution in Washington, D.C. HHS noted that prior estimates have shown a correlation between greater numbers of insurers and lower costs.

Burwell's speech also highlighted what she described as successes of the Affordable Care Act, including reducing the number of uninsured adults by 10.3 million in the past year, expanding Medicare eligibility in more than half the states, and offering subsidized insurance on the Obamacare exchanges.

"The Affordable Care Act addresses big impediments in health care: affordability, access and quality," Burwell said.

The 77 new issuers will be joining insurers that sell plans in 43 states and the District of Columbia where data about insurance participation was available, HHS said. Those states include the 36 states whose residents bought plans on the federal Obamacare exchange HealthCare.gov, as well as eight states that are operating their own health exchanges.

HealthCare.gov will get the lion's share of the new insurers: 57 more than this year, a 30 percent increase that will bring the tally up to 248 issuers.

But the eight exchanges run by individual states and the District of Columbia will see just a 10 percent net increase in the number of insurers: just six more than this year, bringing their total to 67 issuers.

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HHS noted that four states out of the 36 on HealthCare.gov—Indiana, Missouri, New Hampshire and West Virginia—will see at least double the number of insurers that sold plans there this year. And 36 states nationally will have at least one new insurer.

Of the states with available data, just one, California, is seeing a decrease in the number of issuers, from 12 to 10. Despite that decrease, California's market is considered one of the most successful of the Obamacare exchanges, with both the highest number of total enrollees of any state, 1.4 million, and the second-highest percentage of sign-ups among the eligible population at 42.7 percent.

Burwell's announcement comes exactly a week after Minnesota's Obamacare exchange lost the insurer PreferredOne that had sold nearly 60 percent of the health plans this year on that marketplace. The exchange, MNSure, will now just have four insurers selling plans to new enrollees this coming season.

On an informational map distributed by HHS on Tuesday, Minnesota is listed as being one of seven states for which insurer-participation data is not available. The other states are Hawaii, Massachusetts, Nevada, Oregon and Vermont, all of which have had serious problems with their exchange operations, as well as Kentucky, which has been a surprising success among the state-run marketplaces.

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Burwell's announcement of more insurers selling plans is likely to be seized on by Obamacare advocates as proof that more insurance companies believe they can make money by participating on the government-run exchanges.

A number of insurers had sat on the sidelines during Obamacare's first open-enrollment period because of concerns that their plans would be overwhelmed by too many sick enrollees and not enough healthy enrollees to offset the cost of providing benefits.

However, Burwell's announcement Tuesday did not include details on the prices that are expected to be charged for plans sold on HealthCare.gov or the other state-run exchanges when open enrollment begins Nov. 15. Enrollment in the plans is set to end three months later, on Feb. 15.

Price could play a big role in determining how many people enroll in coverage this year, or who drop out of coverage. Another factor, which likely plagued Obamacare's enrollment efforts last year is awareness.

A new poll out this week by the Transamerica Center for Health Studies found that 22 percent of uninsured Americans did not obtain health insurance this year because "they were not aware of the individual mandate to obtain coverage" or pay a fine equivalent to up to 1 percent of their income.Another 43 percent of uninsured respondents to the same poll had not even heard of the Obamacare exchanges, which are they only places they can buy health plans and get federal subsidies that in many cases offset the cost of their coverage significantly.

But Dan Mendelson, CEO of the Avalere Health consultancy, said the news that more insurers are jumping into the Obamacare marketplace bodes well not only for customers on the exchange but also for the political viability of President Barack Obama's signature health-care reform law.

"The exchanges are a robust commercial market—viable in the short run and very strategic for a future that has more individual choice," Mendelson said. "Many of the plans that largely sat out the first year—like UnitedHealthcare—are diving in. The long-term stability of this program is largely defined by insurer reactions, so this is a good sign."

"It gets harder to repeal a program when it has a vibrant commercial market attached," Mendelson said.

Ceci Connolly, managing director of PriceWaterhouseCoopers Health Research Institute, said, "It's clear insurers see growth opportunity in the new exchanges and are meeting the market demand for choice."

"Two other significant points – we're seeing average premium increases nationally of about 7 percent, a sure sign that competition is good for consumers," Connolly said. "And second, with attention turning to the private exchanges that will open for employers in the coming years, HRI recently reported that 32 percent of employers are considering shifting their employees to exchange-based health coverage. All evidence that exchanges will be an enduring part of the developing new health economy."

Larry Levitt, an Obamacare expert with the Kaiser Family Foundation, on his Twitter account responded to the news: "With more insurers selling in ACA marketplaces, the law has passed the viability test. Logistical challenges remain."

Those logistical challenges include an ongoing re-vamp of HealthCare.gov's enrollment technology, which has some experts worried that the federal Web site will not run smoothly when open enrollment resumes Nov. 15.

And that site still has yet to build a so-called "back end," whose technology is supposed to run calculations for financial programs that are designed to minimize the risk insurers face by covering people through exchange-sold plans.

This season's open-enrollment period will end Feb. 15, and be about three months shorter than Obamacare's first season.

About 8.1 million people selected Obamacare plans by the end of open enrollment this past mid-April. But after several months, during which many of them failed to pay their first month's premium or dropped out for other reasons, and when others enrolled during a special enrollment period, there ended up being 7.3 million people currently enrolled in such plans, HHS said last week.