When the state of Mississippi begins offering subsidized health insurance under President Barack Obama’s reform law this year, residents will have only one choice – Magnolia Health Plan – a small insurer little known in most of the country.
The Obama administration hoped to attract robust competition in creating the exchanges, and it is counting on millions of Americans without coverage to sign up for these plans in the program’s first year.
But the nation’s biggest insurers have decided against joining the exchanges on a large scale, professing uncertainty about the roll-out and how much the uninsured would participate. Most are sticking to states where they already sell insurance directly to individuals, leaving at least half a dozen states with only one or two health plans to choose from.
That gives Magnolia, part of Centene Corp, and other small insurers like Molina Healthcare Inc that specialize in serving the poor through state Medicaid programs, a major role in the push to expand U.S. health coverage.
“They are going to be important players in the exchanges that are going to attract a significant low income and modest income population,” said Linda Blumberg, a health economist at the Urban Institute, a research firm in Washington D.C.