Working With State Regulators To Increase Insurance Choices For Consumers PDF Download

In 2017, insurer participation in the health insurance exchanges established by the Affordable Care Act dramatically decreased due to the exit of three major insurers: UnitedHealthcare, Aetna, and Humana. As competition in the exchanges decreased, millions of people were left with only one insurer offering plans in their state and average premiums increased substantially. This study analyzes the relationship between state insurance regulatory policy and insurer participation and how the type of insurer participating in a state’s exchange can affect competition. The study finds that there is not a clear association between a state’s regulatory environment and the level of competition in the exchanges, but the participation of Medicaid insurers and Consumer Operated and Oriented Plans (Co-ops) in state exchanges is associated with increased competition. Additionally, this study finds that the greater the market share of the largest insurer in an exchange, the less competition there will be in that marketplace. This study sheds light on why competition varies in different parts of the country and offers specific recommendations for policymakers to encourage insurer participation in states with limited competition, with the aim of giving consumers more choice and more affordable premiums.