The number of states in the US likely to involve the federal government in plans to establish a health insurance exchange is projected to be higher than expected, according to a recent report carried out by PricewaterhouseCoopers’ (PwC) Health Research Institute (HRI).
The establishment of insurance exchanges comes after the US Supreme Court recent decision to uphold the Affordable Care Act (ACA), which is known as Obamacare. The exchanges are new marketplaces, opening in 2014, that will allow individuals and small businesses to compare and choose private health plans.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
According to the PwC report, 13 states and the District of Columbia have announced that they will run their own exchanges.
PwC’s HRI report projects that a majority of the remaining 37 states will have the federal government directly involved in running their exchanges. Eight states have already chosen to have a federally-facilitated exchange, while three have selected an approach that divides duties in a state/federal "partnership."
Kelly Barnes, PwC US health industries leader said newly-created exchanges represent the biggest insurance expansion since Medicare in 1965.
Barnes said: "The exchanges will serve a group of people who may be purchasing insurance for the first time. Companies seeking to capture this new customer base must work quickly to understand the distinct needs of this group and develop ways to communicate with them in clear, understandable terms."
According to PwC, state-based exchanges will create an irreversible shift in the insurance market that ultimately changes the way medical care is sold in the U.S
For the insurance industry, the exchanges represent a major business opportunity -a market that will translate to $205bn in premiums by 2021, said PwC.
The size of the exchange market will vary depending on states’ decisions to expand Medicaid eligibility to 138 percent of the federal poverty level, an option granted by the Supreme Court ruling in June.
