In states electing  not to establish and operate either type of exchange, PPACA required the  federal government to establish and operate the exchange. 1.) For example, for federally  facilitated exchanges, CMS requires that issuers with more than   20 percent market share in the small-group market participate in the  small-business exchange as a condition of participation in the individual   In adopting this requirement, CMS indicated that the purpose  exchange. Most of the Largest Issuers in the 2012 Individual and Small- group Markets Participated in the 2014 Exchanges, with Exceptions in Some States

In most states, issuers with the largest share of the 2012 individual and  small-group markets participated in the 2014 individual and small- business exchanges. In 2012, a large number of issuers participated in  state individual and small-group markets, although coverage was  generally concentrated among a small number of these participating  issuers. 2.) Most issuers with less than 5 percent of their 2012 market did not  participate in the 2014 exchanges, although in many states more than  one of these smaller issuers did participate. In addition, some issuers that participated in the 2014 individual or small- business exchanges had not participated in that respective 2012 market. Some of the other issuers, however,  had previously provided coverage in other markets. In most states, for 2014 the issuers participating in the exchanges  represented a mix of larger issuers, smaller issuers, and issuers new to  that market. An average of  4 larger issuers in the individual market and 3 issuers in the small-group  market accounted for the majority of these market-share totals in each  state and, on average, more smaller issuers—those that had less than   5 percent of the 2012 market—than larger issuers participated in the  individual exchanges in 2014. Nearly All 2014 Exchanges Had Multiple Participating Issuers, Which Generally Offered More Plans than the Minimum Required by PPACA

In nearly all states, multiple issuers participated in the individual and  small-business exchanges in 2014; an average of 6 issuers and 4  issuers, respectively. Overall, the number of participating issuers varied  widely between states; from 1 to 17 issuers through the individual  exchange and from 1 to 13 issuers through the small-business  exchanges. However, almost all exchanges had more than 1 issuer  participating—49 individual exchanges and 45 small-business exchanges. More than half of participating issuers offered coverage through both the  individual and small-business exchanges, although more issuers  participated in the individual exchanges than in the small-business  exchanges. Of the 323 issuers that participated in the exchanges, 175  participated in both the individual and small-business exchanges in their  state. Of the  291 issuers, 257 offered more than the minimum number of plans  required by PPACA—one gold and one silver plan—in all the rating areas  in which they offered coverage. Of the 207 issuers in the small-business  exchanges, each issuer offered an average of 12 plans in each rating  area and 183 offered more than the minimum number of plans required in  all the rating areas they offered coverage in. Agency Comments

We received technical comments on a draft of this report from the  Department of Health and Human Services and incorporated them as  appropriate. Appendix II: Number of Issuers Participating in the 2014 Individual and Small-business Exchanges, by State

Table 5 presents information from interactive figure 4 on the number of  issuers participating in the individual and small business exchanges in  2014, by state. Appendix III: Number of Plans Offered by Issuers Participating in the 2014 Exchanges across Rating Areas

Table 6 presents information on the number of plans issuers offered in  each state in the individual and small-business exchanges across rating  areas in 2014.
Why GAO Did This Study

PPACA required by January 1, 2014, the establishment in each state of health insurance exchanges—marketplaces where eligible individuals and small businesses can compare and select among insurance plans. Issuer participation, including the number of plans these issuers offer, is a key factor in the extent of consumer choice offered by the exchanges.
GAO was asked to examine the number and types of issuers participating in both the individual and small-business exchanges beginning in 2014, as well as how this compared with issuer participation in the individual and small-group markets prior to the exchanges. In this report, GAO describes (1) the extent to which issuers that previously offered health plans in the individual and small-group markets participated in the exchanges in 2014, and (2) the issuers that participated in 2014 exchanges and the health plans they offered.
GAO analyzed data obtained from CMS and states on the health plans offered by issuers that participated in states' exchanges in 2014. GAO also analyzed CMS data on issuers' participation and market share in the 2012 individual and small-group markets, the most recently available national market-wide data. GAO reviewed relevant laws and regulations and interviewed CMS officials to identify federal requirements related to exchange participation. GAO obtained information on state participation requirements from applicable states.

What GAO Found

Most of the largest issuers of health coverage from 2012 participated in the exchanges that the Patient Protection and Affordable Care Act (PPACA) required be established in all states in 2014. Previously, in 2012, while a large number of issuers participated in state individual and small-group markets, a small number of these participating issuers held a majority of the market share in terms of enrollment. In 2014, for both those exchanges serving the individual market and those serving the small-group market, in more than two-thirds of states the issuer with the largest share of the 2012 market participated in the 2014 exchange. In addition, in most states, other larger issuers with a 5 percent or more share of the 2012 market participated in the 2014 exchanges. Most smaller issuers with less than 5 percent of the 2012 market did not participate in the 2014 exchanges, although in many states more than one of these smaller issuers did participate. In addition, some issuers that participated in a 2014 individual or small-business exchange had not offered coverage in the respective 2012 market, although they may have offered coverage in other markets within the same state. In most states, for 2014, the issuers participating in the exchanges represented a mix of larger issuers, smaller issuers, and issuers new to that market.
Multiple issuers participated in nearly all 2014 exchanges and generally offered more health plans than the minimum of two required by PPACA. Overall, the number of participating issuers varied widely between states, from 1 to 17 issuers in the individual exchanges and from 1 to 13 issuers in the small-business exchanges. However, almost all exchanges—49 individual and 45 small-business—had more than one issuer participating. More than half of participating issuers offered coverage through both the individual and small-business exchange in that state, although more issuers participated in the individual exchanges than in the small-business exchanges. Issuers varied substantially in the number of plans they offered; 257 of the 291 issuers in the individual exchanges, and 183 of the 207 issuers in the small-business exchanges, offered more than the minimum number of plans required by PPACA in all the rating areas in which they offered coverage. For both the individual and small-business exchanges, collectively, issuers in the 25 most populous states tended to offer a higher than average number of plans, while those in less populous states were less likely to do so.
GAO received technical comments on a draft of this report from the Department of Health and Human Services and incorporated them as appropriate.