CHA News Article

Report Examines Impacts of Market Concentration on ACA Marketplace Premiums

A recent Health Affairs study examines the impact of market concentration on the growth of health insurance premiums between 2014 and 2015 in two state-based marketplaces under the Affordable Care Act: Covered California and NY State of Health. Findings from both states revealed a positive association between hospital concentration and premium growth and a positive (but not statistically significant) association between medical group concentration and premium growth. However, health plan concentration  was positively associated with premium growth in New York, but negatively associated with premium growth in California — potentially the result of Covered California’s selectively contracting with health plans.

According to the report, “The ACA marketplaces provide a natural laboratory for studying the effects of competition and market power. The marketplaces’ structured competition among health plans, product standardization, and data transparency are valuable in enabling this research effort. We foresee that further research of the marketplaces will provide important insights into whether competition is operating effectively in the market for health insurance.”

The full report is available on the Health Affairs website.