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By Jeremy Glaser and Vishnu Lekraj | 10-24-2013 11:00 AM

Which Insurer Is Best Positioned for the ACA?

After setbacks in the Affordable Care Act's rollout are resolved, we think one 4-star managed care firm is particularly well-positioned to take advantage of the public exchanges over the longer term, says Morningstar's Vishnu Lekraj.

Jeremy Glaser: For Morningstar, I'm Jeremy Glaser. What impact will the glitches in the Affordable Care Act's exchanges have on the managed-care organizations? I'm here with Vishnu Lekraj, a Morningstar senior analyst, to look at this question.

Vishnu, thanks for joining me today.

Vishnu Lekraj: Thanks, Jeremy.

Glaser: Let's talk a little bit about what kind of glitches people are encountering right now. When you try to sign up for one of these exchanges, what's happening? Are people enrolling the way that insurers had initially expected?

Lekraj: Apparently, there is a big bottleneck in the whole public insurance exchange market that's run by the federal government. Within the public exchange market, you have two types: the state-run and the federal-run. A lot of the state-run public exchanges have run very smoothly; the rollout has been very good. If you look at California, for example, it's a very smooth rollout. But the states that chose not to run their own exchange, the ones that chose to have the federal government run the exchange, those are where you're finding a lot of the problems. And it looks like the government was underprepared and underinvested and didn't do a lot exactly to roll it out in a smooth manner.

Glaser: What's the open-enrollment period look like? How long does the government have to fix this before it becomes a bigger problem?

Lekraj: Theoretically they have as long as they want. I think they pushed back the open-enrollment date to March now in terms of there being the individual mandate coming into play for fines, taxes, and whatnot.

They can push around the dates. They want to delay the employer mandate a year. But the crux of the Affordable Care Act is the individual mandate, and it's going to be hard for them to push that back any further than what it has been.

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