Your Customers are Living in the Wrong State!

Well, not necessarily. Although, for many drug and device manufacturers with uninsured customers, it may seem this way.  

Depending on where one lives can make a huge difference on how many health insurance plans consumers have to chose from via the online healthcare exchanges. For instance, in California, there will be 13 different insurers offering plans in the new health insurance exchange starting October 1, 2013. On the other side of the spectrum, Mississippi has only two options to offer so far.¹

This disparity is raising some issues because one of the goals of the exchange was to create competition among insurers so that each would provide the best plan possible at low premiums. Now, this competition may only occur in some states. The figure² below demonstrates this wide variation in five states that have begun to establish their health plans.

Although there is a large variation in the number of plans offered, it is estimated that most states will offer five or more plans.

Can you guess how many uninsured Americans will purchase insurance from the exchanges? Check out the chart below to see enrollment predictions.³

As you can see, starting in 2014, 10 million newly insured Americans are expected to be covered through public or private exchanges. By 2018,  it is anticipated that the number of those enrolled in private exchanges will surpass those in public exchanges, resulting in a total enrollment of 71 million people in public and private exchanges.

For drug and device manufacturers, the wide range of number of offered health plans per state may cause some issues to arise. For instance, for states that only have a couple options offered, those health plans may have higher premiums than the plans in states with high competition. With higher prices for health insurance, some patients are less likely to have a sufficient amount of money left over to cover their deductibles and co-pays.  So, drug and device manufacturers across the country may find that the new health insurance exchange affects them in different ways based on which states their customers live in.

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¹http://insuranceexchangehq.com/mississippi-health-insurance-exchange-update/
²http://www.nytimes.com/2013/06/17/health/choice-of-health-plans-to-vary-sharply-from-state-to-state.html?pagewanted=1&_r=0
³http://www.accenture.com/us-en/Pages/insight-public-vs-private-hix-annual-enrollment-chart.aspx

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