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Report: Overhaul offers key insurer growth chance

Associated Press Modified: October 2, 2012 at 8:45 am •  Published: October 2, 2012

INDIANAPOLIS (AP) — The health care overhaul is poised to pour billions of dollars into an insurance industry thirsty for customers, according to health care consultant PwC.

The massive federal law aims to cover millions of uninsured people and will take a major step toward that goal in 2014, when the government starts offering tax credits to help many Americans buy coverage through online exchanges. Those exchanges will act as virtual marketplaces for customers to comparison shop for the right coverage.

PwC estimated in a report released Tuesday that 12 million people will find coverage on these exchanges in 2014 and pay a total of $55 billion in premiums for coverage. It projects that those totals could rise to 29 million people and $205 billion in premiums by 2021.

PwC says most of this money will be new, but some will represent premiums shifted from other parts of the insurance market. For instance, the total may include people who had coverage through their employer but switched to buying a policy on the exchange.

The actual numbers also will depend on how many states decide to expand Medicaid coverage like the overhaul requires. Medicaid is the state and federally funded program that provides coverage for the needy and disabled. The Supreme Court ruled earlier this year that individual states could opt out of this expansion.

Nevertheless, the exchanges and the subsidies will present a "huge market opportunity in health care," said Ceci Connolly, managing director of PwC Health Research Institute.

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