But the other companies may delay entering any given exchange until they see a real chance to gain customers. Given the uncertainty over how well the exchanges will function, and whether enough healthy people will enroll, insurers are likely to enter only those markets where they already have a sizable number of existing customers.
“If you’re not going to protect your position, you would more likely take a cautious, wait-and-see-stand,” Ana Gupte, a health insurance analyst for Dowling & Partners Securities.
Once the market becomes more established, some of those companies may start offering plans, Mr. Jost said. “As soon as they see there’s money to be made there, they will jump right in,” he said.
The law has clearly encouraged the entry of new competitors. As many as a quarter of the companies vying to offer plans on the 19 exchanges run by the federal government are new to the market, federal officials said in a memo released last month.
If the experience in Massachusetts is any guide, the fact that a plan is new and unknown might not keep it from becoming popular quickly. In that state, a relatively unknown insurer, Neighborhood Health Plan, captured a large market share. The Affordable Care Act “represents disruption,” said Kevin J. Counihan, who spent several years in Massachusetts helping to run its marketplace before coming to Connecticut to head its exchange.
On the flip side, though, one of the potential new entrants in Vermont, the Vermont Health Co-op, has not been able to win licensing approval from state regulators.
Insurers also say they plan to compete aggressively on price. The new law places strict limits on how much of every dollar of premium can go to anything other than medical expenses, and the insurers say success will depend on enrolling as many customers as possible rather than figuring out how high a premium they can charge to raise profits.
“It’s more a volume game,” said Wayne S. DeVeydt, an executive vice president at WellPoint, which expects to spend about $100 million in marketing for plans offered on the exchanges.
To compete, insurers will have to find ways to offer inexpensive plans, he said. In California, for example, WellPoint’s Anthem Blue Cross wants to offer a plan in southern Los Angeles for as little as $259 a month for a 40-year-old. In Maine, WellPoint has asked regulators to approve plans in which it will partner with selected health systems to offer less expensive coverage for people willing to go to a specific network of doctors and hospitals.
The consumer-operated plans, known as co-ops, are also expected to put pressure on other insurers to hold down prices. “We don’t have to return money to stockholders on Wall Street, like for-profit insurers,” said Jerry Burgess, the chief executive of Consumers’ Choice Health Plan, the co-op established in South Carolina.
He says the insurer expects to charge little more than the actual costs of its medical care and will lower its premiums if possible. “We would see an opportunity to gain market share by lowering our price,” Mr. Burgess said. “That’s exactly what health reform hopes will happen.”
The plans offered by insurers like Molina Health Care that specialize in Medicaid, the government program for low-income individuals, may also prove to be formidable competitors because of their focus on serving that population. “These are players who are going to be aggressive,” said Jaime Estupiñán, a vice president at Booz & Company.
Experts say large health systems are also expected to compete. Kaiser and Sharp Healthcare, a San Diego hospital group that also offers insurance, are expected to participate in California, and hospital groups and insurers are increasingly working together to offer new plans.
Insurance executives concede that it may take years for the new market to take shape. “We’re looking at three to five years,” said Joel Farran, an executive for the Health Care Service Corporation, which operates nonprofit Blue Cross plans in four states.
—By Reed Abelson, The New York Times.