Modest progress has been made in the evolution of market competition between and among health insurers participating in the health insurance exchanges created through the Affordable Care Act, but gaps remain in insurance-purchasing options for many Americans, particularly in rural areas. Those are the conclusions of a new healthcare policy brief published on March 21 by the Urban Institute, with the support of the Robert Wood Johnson Foundation (RWJF).
According to “What Characterizes the Marketplaces with One or Two Insurers? An Update,” “[M]ore than 20 percent of the U.S. population now lives in an area with five or more marketplace insurers, [but] significant regional variations remain,” particularly by region. The authors report that “The Northeast leads the nation in marketplace insurer competition, with a little more than 40 percent of its population living in areas with five or more marketplace insurers,” while “In the South, only 4 percent of residents live in areas with five or more marketplace insurers, while a majority (just under 53 percent) live in areas with only one or two marketplace insurers”; and “Approximately 26 percent of the population in both the West and the Midwest live in areas with five or more insurers, with 19 percent and 40 percent living in areas with only one or two insurers, respectively.”
As the report notes, “In 2017, 271 out of 498 rating regions had either one or two marketplace insurers, and 69 had five or more insurers. The rating regions with one or two insurers tended to have much smaller populations than those with five or more insurers, because rating regions with fewer potential enrollees generally cannot support enough insurers to make markets competitive. Premiums in the rating regions with one or two insurers were, on average, significantly higher than in regions with five or more insurers. This brief provides new information on the number of marketplace-participating insurers and premiums in ACA rating regions throughout the United States using 2018 and 2019 data.”
Meanwhile, the report states, “Marketplaces with greater populations and more insurer competition generally continue to succeed, but a large and increasing number of marketplaces are falling short. The decrease in highly competitive markets is concerning because marketplace premiums tend to be substantially higher in rating regions with one insurer than in more competitive marketplaces. In 2019, the median benchmark (second lowest price silver plan) premium for a 40-year-old non-smoker in regions with one insurer cost $592 per month compared to $376 per month in regions with five or more insurers, a difference of more than 36 percent.”
