State says 6 insurance carriers submit plans for exchange

Story originally appeared on the Chicago Tribune.

Six insurance carriers submitted 165 separate health insurance plans to be offered on the Illinois Health Insurance Marketplace, the online exchange where individuals and small businesses in October can begin buying coverage that begins next year, state officials said Wednesday.

The state did not say which insurers submitted the health plans, which must first be vetted by state and federal regulators to ensure they comply with new rules and regulations.

Almost a million Illinois residents will be eligible for a new federal income tax credit to help offset the cost of buying health insurance, a key component of President Barack Obama's health care overhaul that requires individuals to carry health insurance or pay a penalty. To receive the point-of-sale credits, consumers must buy health insurance through the exchange.

State officials expect about 486,000 Illinoisans to purchase health coverage via the exchange next year, which will be operated in a partnership between the state and federal governments in its first year. The state projects as many as 1.3 million in the state will buy an exchange-based product by 2017.

"I am very encouraged that we have seen multiple plans being offered on the Illinois Health Insurance Marketplace," said Gov. Pat Quinn, in a statement. "This means that people and families that have been struggling to obtain health coverage will have many options to choose from when we begin the open enrollment process."

Blue Cross and Blue Shield of Illinois, by far the state's largest insurer in terms of market share, and Land of Lincoln Health, one of 24 new health insurance cooperatives approved by the federal government, each have committed to offering plans on the Illinois exchange, though neither insurer would say Wednesday afternoon how many plans they submitted or in which coverage levels.

Land of Lincoln, which received $160 million in federal funding in December to form a consumer operated and oriented plan, or co-op, got the official go-ahead from Illinois regulators this week to sell health plans starting in 2014.

The number of plans submitted is short of the amount the state estimated earlier this year. Officials previously said as many as 400 commercial insurance products could be offered on the exchange.

Some of the nation's largest insurers, including Aetna Inc., UnitedHealth Group Inc. and Humana Inc., declined to say whether they submitted plans in Illinois. Aetna and Humana executives each said this week that the insurers plan to participate in exchanges in 14 states, though neither company revealed which.

Aetna Chief Executive Mark Bertolini said Tuesday in a conference call with Wall Street analysts that the company has filed applications to sell insurance plans in some of those states, and noted that premium rates in some regions reflect contracts that Aetna has negotiated with hospitals and doctor groups. Those contracts are priced between Medicare rates and the higher private commercial rates, he said.

Humana said Wednesday it plans to participate in health insurance exchanges in states where it already has a strong network of contracts with hospitals and doctors.

United, meanwhile, has only said that it was considering submitting exchange-based plans for consideration in 10 to 25 states.

Another major Illinois insurer, Centene, which operates IlliniCare, a coverage plan for the state's Medicaid program, also would not say whether it submitted plans to be included on the exchange.

All plans in the Illinois insurance exchange must provide a baseline level of coverage, dubbed essential health benefits. Mandated items and services fall under 10 categories, including ambulatory care, prescription drugs and laboratory services.

Plans on the exchange also must adhere to strict financial limits set for the actuarial value of each product, or the percentage of the cost of benefits they will pay.
Those requirements limit the variety of products insurers can offer, which the government hopes will spur more competition on cost.

The plans insurers submitted to the state include financial details, like monthly premiums, deductibles and copayment amounts, though neither the insurers nor the state would reveal those figures. Illinois expects to complete its review of the plans by late July.