We are starting to get a sense of what health insurance competition will look like under Obamacare, with a dozen states now having made public data on which carriers want to sell on the new marketplaces.
As you can see in this chart that I've put together, there is widespread geographic variation in how many plans want to participate in the exchanges.
Two things to keep in mind in looking at this graph:
The numbers could change. What you're looking at are the health plans that have applied to sell on the new state marketplaces. Some could get rejected for not covering all the benefits required under the Affordable Care Act, for example.
Two states on this list are an exception. Both California and Oregon have already gone through the process of approving health plans. Oregon, for example, initially had 22 health plans apply to sell on its exchange but culled that list down to 12.
The big jump downward isn't likely to happen in many other states. Oregon is among the six states that allow the exchange to be an "active purchaser," meaning it can pick and choose which health plans get to sell on the exchange. Most other states let any health plan that meets a set of requirements compete.
The numbers include two marketplaces. Under the Affordable Care Act, each state will have two health insurance marketplaces: One that sells to individuals and another for small businesses. These numbers represent total carriers that have applied to sell on either marketplace. Not each market has each health plan selling in both; Rhode Island, for example, has four carriers in its small group market but just two on the individual side.
Will participation lead to competition? We don't quite know. One big challenge with the individual market, right now, is that most states have one or two health plans that are incredibly dominant. Sometimes, there could be dozens of other plans that have barely any market share, covering a few hundred or even just a few dozen people.
One big question about Obamacare is whether exchanges change that dynamic, if the new marketplace lets one of the non-dominant plans gain a bit of stronger footing in its market share. The numbers we have so far can't really tell us whether that will happen. An exchange with 13 health plans could still end up with one or two dominant carriers. This is one of those frustrating instances where we just have to wait and see what happens next.
For those who are curious about plan participation here are links to read more about plan participation in states above: Michigan, Ohio, California, Maryland, Oregon, Minnesota, Illinois, Rhode Island, District of Columbia, Arkansas and Vermont.