Those who purchase health insurance through the Affordable Care Act’s state and federal exchanges will have more choices for coverage beginning in 2015, according to a Department of Health and Human Services report released Tuesday.

HHS says 77 new carriers will offer coverage on the marketplaces next year — a 25% percent increase — but provided no further details about those carriers.

“Because the issuer data for 2015 we used were still preliminary, we did not conduct any analysis of issuer participation at the local level,” an HHS official told EBA via email.

Corroborating the HHS report, McKinsey Center for U.S. Health System Reform also says there will be an influx of carriers on the marketplace next year. In a report released this month, McKinsey found the number of insurers to increase by 26% among the 41 states included in its study.

The HHS report examined data from 44 states — 36 of which are part of the federally facilitated marketplace and eight operating in state-based marketplaces.

The federal marketplace states stand to make the most gains, adding 57 new carriers next year — a 30% increase — and four of those states will double the number of ACA carriers they have this year.

The state-based marketplaces will add six carriers, a 10% growth, and 36 of the 44 states in the report will have at least one new carrier next year.

HHS Secretary Sylvia Burwell says the report indicates the ACA is working.  “When consumers have more choices, we all benefit,” she says.

More competition leads to lower costs, HHS says, claiming the addition of one carrier drops the price of a silver plan by 4% on average. More carriers also mean more choices for people shopping for insurance, HHS adds.

Also see: Brokers dispute study showing SHOP exchanges offer cheaper health plans

Until now, for some small business owners, lack of competition has prompted them to stop offering coverage.

In Texas, which so far has had just one company participating in the Small Business Health Options Program, some employers opted to cease benefits and increase wages so employees can buy individual plans through the ACA, says Financial Partners owner Kelly Fristoe.

Broker Kenneth Statz has seen similar action taken by his Ohio clients with 10 or fewer employees. The cost to employers is nearly the same and employees usually receive better coverage, he says. 

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