What's The Impact When Health Plans Compete?

Looking at nearly eight months of data, three researchers out of Northwestern and MIT published an analysis of the competition in the ACA healthcare exchanges. Their analysis on the competitiveness of premiums focused exclusively on select silver-rated plans. At this time, not all insurers list on the exchange; however, had all insurers offered plans, the researchers estimate that premiums would have been 11% lower, with a cost savings of $1.7 billion. Yet, not everyone benefits the same amount. Some states, such as West Virginia, only have one insurer who lists on the exchange, while others, like New York, have 17 different insurers.

A number of studies have found that additional insurers in the marketplace lead to lower premiums. The upside is that as time progresses more insurers will list on the exchange, evidenced by UnitedHealthcare, the largest insurer in the United States, declaring their intention to enter 24 markets in 2015, increasing competition and leading to lower premiums in those markets.

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