Why Are the Health Insurance Marketplaces Thriving in Some States but Struggling in Others?

ISSUE

In 2017, health insurance marketplaces in some states were thriving, while those in other states were struggling. What explains these differences?

GOAL

Identify factors that explain differences in issuers’ participation levels in state insurance marketplaces.

METHODS

Analysis of the Robert Wood Johnson Foundation’s HIX Compare dataset, and the National Association of Insurance Commissioners’ 2010 Supplemental Health Care Exhibit Report.

FINDINGS AND CONCLUSIONS

State policies and insurance regulations were key factors affecting the number of issuers participating in the marketplaces in 2017. Marketplaces run by states had more issuers than states that rely on the federally facilitated marketplace. States with fewer than four issuers tended to have policies in place that could have been destabilizing--for example, permitting the sale of plans not compliant with the Affordable Care Act’s requirements regarding essential health benefits or guaranteed issue. Consumers in states that did not take steps to enforce these insurance market reforms still benefited from their protections, however; they were just enforced at the federal level. States with more issuers were also more likely to have expanded Medicaid. States with fewer issuers tended to be rural and have smaller populations, more concentrated hospital markets, and lower physician-to-population ratios.