Why Health Insurer Competition Thrives in Some State Marketplaces but Not in Others
Although supporters and opponents of the Affordable Care Act (ACA) hold different views about health policy, they do have something in common: a desire to increase the number of health insurers participating in the individual insurance market. Higher participation translates into greater price-based competition as well as more choice for consumers.
In a new Commonwealth Fund report, Jon Gabel, Heidi Whitmore, and colleagues examine factors that help explain wide differences in the number of insurance carriers participating in the ACA marketplaces across states, and why some marketplaces are performing better than others. The report finds that states using the federal marketplace in 2017 tended to have fewer carriers, as did states that didn’t expand Medicaid, and those that didn’t adopt into law various ACA insurance market reforms.
Going forward, major reductions in federal advertising and navigator funding also could have a negative impact, particularly for federal marketplace states.
The authors say stabilizing and strengthening markets for consumers and insurers alike will require initiatives at the federal or state level.
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