Increasing Insurance Choices In The Affordable Care Act Marketplaces, 2018-21

Abstract

The Affordable Care Act (ACA) relies on insurers to offer health plans in the individual health insurance Marketplaces. Since the ACA's implementation, levels of Marketplace competition have varied, reaching a nadir in 2018. We examined the characteristics of counties that experienced changes in insurers' participation in the ACA Marketplaces from 2016 to 2021. Using data from the Kaiser Family Foundation and other sources, we found that 1,968 counties (accounting for 66 percent of the US population younger than age sixty-five) have more insurers in 2021 than in 2018, whereas only twelve counties (comprising 0.4 percent of the US nonelderly population) have fewer insurers. The number of counties with monopolist Marketplace insurers declined from 1,616 in 2018 to 294 in 2021. Recent Marketplace insurer gains were more likely in counties that lost insurers from 2016 to 2018 or had a monopolist insurer in 2018. Increased competition may lead to lower gross premiums in the ACA Marketplaces. Given the Biden administration's support for the ACA Marketplaces, it appears likely that the ACA individual health insurance market will be stable and profitable for the next several years.

Exhibit 1. Percent of US population younger than age 65, by number of insurers on the Affordable Care Act Marketplace at the county level, 2018–21

SOURCE Authors’ analysis of annual county-level data on insurers’ Marketplace participation from the Kaiser Family Foundation and population data from the Area Health Resources Files, 2018–21.

Exhibit 2. Mean number of Affordable Care Act Marketplace insurers per county, 2016–21, by insurer participation in 2018

SOURCE Authors’ analysis of annual county-level data on insurers’ Marketplace participation from the Kaiser Family Foundation, 2016–21. NOTE The exhibit displays the mean number of unique corporate parent companies of insurers (which may have multiple Health Insurance Oversight System identification numbers for different licenses for products such as health maintenance organizations and preferred provider organizations available on the Affordable Care Act Marketplaces) in 2016, 2017, 2019, and 2021, stratified by the number of Marketplace insurers that were available in 2018.

Exhibit 3. Change in the number of insurers offering Affordable Care Act Marketplace insurance policies, by county, 2018–21

SOURCE Authors’ analysis of annual county-level data on insurers’ Marketplace participation from the Kaiser Family Foundation, 2018–21. NOTE The exhibit displays the net change in the number of unique corporate parent companies of insurers (which may have multiple Health Insurance Oversight System identification numbers for different licenses for products such as health maintenance organizations and preferred provider organizations) offering Marketplace plans between 2018 and 2021.