How the ACA Is Changing How Health Plans Compete

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<p>Before the Affordable Care Act (ACA), one or two health insurers dominated the individual health insurance market in most states. There was little incentive to compete on value; instead, carriers primarily sought to gain a leg up by screening potential customers for their risk of incurring high medical costs.</p><p>One of the ACA’s goals is to encourage carriers in the new health insurance marketplaces to compete not on how well they avoid risk but on how much value they provide to consumers. In a new Commonwealth Fund issue brief, Katherine Swartz, Mark A. Hall, and Timothy S. Jost examine six states—Arkansas, California, Connecticut, Maryland, Montana, and Texas—to see how carriers there are competing now that people can’t be denied coverage based on health status.</p>
<p>The authors’ research shows that during the first year of the ACA marketplaces, at least, carriers appeared to differentiate their products based on patient-cost-sharing requirements and the composition of provider networks, though these strategies differed across the country. Over time, strategies will likely evolve, the authors say, as carriers, providers, and consumers gain further experience in the marketplaces.</p> Read more