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Things you should know about the new highly varied state insurance exchanges

With only months remaining before Americans can start buying insurance through their State’s insurance exchanges, it is important to get familiar with the vast variances of insurers between states. Depending on your state of residence, your policy choices could be limited to current and dominant plans. States like California, Colorado and Maryland have attracted an assortment of insurers, but states like Maine, for example, could be restricted to a mere two insurance companies to choose from.

What insurers can you expect to find? Insurers already active in the market, that have established relationships with local hospitals, physician groups, and state regulators, are the most likely to be available to you within the exchanges. “What we’re seeing is a reflection of the market that already exists,” said Timothy S. Jost, a law professor at Washington and Lee University in Virginia and close follower of health care law.

The concept behind the new exchanges is to allow consumers more control, and greater clarity, in making their choices about health insurance. For the first time, millions of Americans who face a poverty level income will qualify for government subsidies to offset the cost of their premiums. Additionally, insurers selling plans on the exchange must cover a basic set of benefits and offer coverage to consumers with preexisting medical conditions. Currently, there are no plans that cover as many benefits as will be included in all plans next year.

With new and existing insurers working harder to provide more appealing plans, competition will certainly follow. As consumers are required to purchase health insurance in 2014, the competition between insurers should generate lower prices to entice new members. Despite the competition between insurers, one major goal is in the works: increasing access to affordable health care. This change will directly impact many of our clients who have been denied access to treatment or access to health benefits, simply because insurers have been permitted to turn away the sick.

Important to note, not all major insurers will remain active and competitive in the exchange. For instance, on July 2nd, 2013, California Insurance Commissioner Dave Jones issued a press release expressing concern over United Healthcare’s decision to exit California’s individual market. Commissioner Jones anticipates that reduced competition such as this will only hurt California consumers. What’s the problem with one less participating insurer? According to Commissioner Jones, “Their departure means less choice, less competition, and more market consolidation by the remaining big three health insurers – Anthem Blue Cross, Blue Shield of California, and Kaiser – which means an increased likelihood of even higher prices from those health insurers downstream.”