New research finds that marketplace health insurance premium levels and premium growth directly correlate with the number of insurers participating in a given rating region. Median monthly benchmark premiums range from $270 in markets with six or more insurers to $451 in markets with just one insurer in 2017. Likewise, in regions with six or more insurers, the median 2017 benchmark premium increase was 5.0 percent compared to 29.8 percent in regions with only one insurer. The report, prepared by the Urban Institute with funding from the Robert Wood Johnson Foundation, also finds that markets with only one or two insurers tend to be heavily concentrated in southern states and sparsely populated areas.
Researchers compared the number of insurers participating in each of the 498 premium rating regions across the country, their benchmark premiums —or the cost for their second-lowest-cost silver plan—and the populations of these regions, according to the US Census Bureau’s estimates for 2014.
The median population size for rating regions with only one marketplace insurer is 148,000, compared to 1.1 million in rating regions with six or more insurers. Nearly 34 percent of the country’s population lives in rating regions with one or two marketplace insurers, with 146 regions having just one insurer selling nongroup coverage through its state marketplace in 2017, and 125 having two insurers. Equivalent shares of the U.S. population live in areas with five or more insurers as one or two insurers.
"When states have few insurers there are usually some structural factors like low population," said Katherine Hempstead, senior adviser at the Robert Wood Johnson Foundation. “But often there are also state policy choices, like the decision to maintain transition plans that can make the market less attractive for other insurers."
