The Relationships of Competition and Demographics to the Pricing of Health Insurance Premiums in Affordable Care Act–Era Health Insurance Markets

Abstract

The Affordable Care Act (ACA) expands health insurance coverage to millions of Americans. Despite the act having been signed into law more than five years ago, health care affordability in the ACA era remains a topic of empirical inquiry, relevant to academicians and public policy makers. A primary concern, with implications for any future legislation, is whether all consumer groups have equitable access to health insurance options through ACA-mandated health insurance markets (HIMs). Utilizing pricing information and demographic data for states that adopted the Healthcare.gov platform, this study examines relationships between health insurance premiums, competition, and population characteristics. Results indicate that competition within HIMs is multifaceted. Although markets with a large number of insurance plans are associated with lower premiums, this effect is moderated by the concentration of insurers in the market and number of rating areas. Furthermore, population characteristics are related to premiums, where premiums vary by HIM demographics. Findings also suggest that access is less equitable in areas that have not adopted Medicaid expansion plans and areas that serve a large percentage of uninsured consumers.