The individual insurance market is now too big to ignore, drawing new crowds on and off state exchanges.
A combination of newcomers, increasing enrollment and, in many states, regulatory scrutiny is already starting to show a trend of narrowing premium variation. The new competition promises to be great for consumer choice, and if the Affordable Care Act's risk adjustment programs work as intended, the new individual market could be a sustainable business for insurers, although not without challenges.
While some state exchanges had limited health plan options and controversially narrow provider networks last year, many are now seeing a boom in exchange participation.
In Washington State, where the individual market grew by 30 percent last year, four new insurers have submitted proposals to sell exchange plans -- Columbia United Providers, Health Alliance Northwest Health Plan, UnitedHealthcare and Moda Health Plan -- bringing the total number of exchange insurers to 12.
UnitedHealthcare's entrance in particular shows the opportunity that payers see. The nation's largest insurer was cautious about entering exchanges, selling plans in just five states last year. But now it's among what may end up being dozens of insurers entering or expanding their exchange presence for fear of being left out.
Altogether in Washington, 17 health insurers -- some with the same parent company -- have submitted proposals for more than 230 individuals plans on and off the state exchange, with an average proposed increase in premiums of 8 percent.
"The proposed rates are far from final," said Washington insurance commissioner Mike Kreidler, one of 35 state insurance commissioners with premium approval authority. "The insurers have limited experience with these new plans so they'll have to do their homework to justify any changes."
Twelve of those insurers have filed 114 individual health plans for sale inside the exchange, Washington Healthplanfinder, with an average premium increase of just over 5 percent, ranging from Molina bringing down premiums by 6 percent and Group Health Cooperative seeking a hike of 11 percent.
Premera Blue Cross is seeking an 8 percent increase for plans both on and off the exchange. Washington State's other Blue company, Regence, is taking a different tack, with both premiums and branding.
In Washington and Oregon, Regence, a part of the Cambia Health Solutions holding company, introduced the health plan Bridgespan for the exchanges and retained Regence for off-exchange products.
In Washington, Regence's Bridgespan is proposing an increase of 1.7 percent, while the two off-exchange plans -- Regence BlueCross BlueShield of Oregon and Regence BlueShield -- are seeking increases of 9.5 percent and 5.1 percent respectively.
In Oregon, where Regence is the largest insurer in a market that's also growing more crowded, carriers are hoping this year's open enrollment will make up for last year's disaster.
And Regence especially is facing competition. Moda Health Plan, formally ODS, nabbed some 40 percent of individual plan membership last year and sold about 70 percent of exchange plans.
With 10 insurers selling on the exchange, including two cooperative plans, Oregon is "incredibly crowded," admitted Bill Bradley, vice president of product management at Regence/Cambia Health Solutions, during a recent conference hosted by America's Health Insurance Plans in Seattle.
Of the 13 Oregon insurers selling individual policies on and off the exchange for 2015, the average premium increase proposed is just over 2 percent, according to an analysis by PwC, ranging from a decrease by Oregon's Health CO-OP of 21 percent to an increase of 28 percent by Time Insurance.
Regence's Bridgespan is proposing average increases of 3.9 percent, with silver plans for a 40-year-old nonsmoker costing $270 per month before subsidies, a price that is in the middle-upper range.
As the rates are proposed, Atrio Health Plan and Oregon's Health CO-OP will be selling the lowest-priced silver plans -- $202 and $203 respectively -- while Trillium Community Health Plans will be selling the most expensive, at $352, ahead of PacificSource ($290) and Health Net ($279). Moda, the big membership winner in last year's open enrollment, is pricing its silver plans for 40-year-old nonsmokers at $249 a month.
Outside the Pacific Northwest, meanwhile, exchanges are also growing more competitive.
In Michigan, 18 insurers will be selling exchange plans this year, up from 13 last year. The number of insurers in Indiana is set to double to eight, with UnitedHealthcare also poised to enter the market there, in WellPoint's home field.
In New Hampshire, where last year there was just WellPoint's Anthem, four new insurers are entering the exchange market: Harvard Pilgrim, Assurant Health and cooperatives from the north and south, Maine Community Health Options and Massachusetts-based Minuteman Health.
Maine's exchange is also going to heat up. Harvard Pilgrim, which has a sizable group business in Maine, is set to join Community Health Options and Anthem as the third carrier, after sitting out the first open enrollment period.