More Insurers Lower Premiums: Evidence from Initial Pricing in the Health Insurance Marketplaces

Dafny, Leemore; Gruber, Jonathan; Ody, Christopher

doi:10.1162/ajhe_a_00003

Cited by 79 publications

(70 citation statements)

References 18 publications

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“…It is likely that market competition and the recent participation decisions of large national insurers are also having an important effect on the options available to exchange consumers. 10 We did not examine cost sharing for physician visits or inpatient services. Cost sharing for these services deserves more in-depth study, as does a comparison of out-of-network to in-network fees.…”

Section: Discussionmentioning

confidence: 99%

“…The competitiveness of the local insurance markets and the number of insurers in each exchange may also drive geographic variation in premiums. 10 Comparing Plans ▸DRUG COVERAGE: In comparing exchange plans to employer-based coverage, it is important to compare plans of similar actuarial values. Plans in lower metal tiers are designed to pay lower amounts, so they necessarily involve higher cost sharing.…”

Section: Exhibitmentioning

confidence: 99%

“…9 The governance structure of an exchange has important implications for the benefit structure of health insurance plans, since state-based exchanges have had wide latitude in setting up their benefit structures. [10][11][12] Our primary objective was to characterize the variability in drug coverage across metal tiers and plan types, such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Comparing metal tiers (for example, bronze to silver) or plan types (for example, HMOs or PPOs) within the silver tier would allow us to examine differences along these important dimensions.…”

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confidence: 99%

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Comparing Employer-Sponsored And Federal Exchange Plans: Wide Variations In Cost Sharing For Prescription Drugs

et al. 2015

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Just under seven million Americans acquired private insurance through the new health insurance exchanges, or Marketplaces, in 2014. The exchange plans are required to cover essential health benefits, including prescription drugs. However, the generosity of prescription drug coverage in the plans has not been well described. Our primary objective was to examine the variability in drug coverage in the exchanges across plan types (health maintenance organization or preferred provider organization) and metal tiers (bronze, silver, gold, and platinum). Our secondary objective was to compare the exchange coverage to employer-sponsored coverage. Analyzing prescription drug benefit design data for the federally facilitated exchanges, we found wide variation in enrollees' out-of-pocket costs for generic, preferred brand-name, nonpreferred brand-name, and specialty drugs, not only across metal tiers but also within those tiers across plan types. Compared to employer-sponsored plans, exchange plans generally had lower premiums but provided less generous drug coverage. However, for low-income enrollees who are eligible for cost-sharing subsidies, the exchange plans may be more comparable to employer-based coverage. Policies and programs to assist consumers in matching their prescription drug needs with a plan's benefit design may improve the financial protection for the newly insured.

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Section: Discussionmentioning

confidence: 99%

Section: Exhibitmentioning

confidence: 99%

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Comparing Employer-Sponsored And Federal Exchange Plans: Wide Variations In Cost Sharing For Prescription Drugs

et al. 2015

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“…As shown in Figure , the number of monopoly counties—those with a single insurer—decreased by roughly one‐third from 1405 to 936. While overall premiums did not decrease substantially in 2019 despite increased insurer participation, empirical evidence has demonstrated that increased insurer participation and stronger competition are associated with lower premiums . Premium levels represent a key outcome of interest to policy makers and the public because they are the most salient measure of health plan affordability in the individual market.…”

Section: Introductionmentioning

confidence: 99%

Individual market health plan affordability after cost‐sharing reduction subsidy cuts

Drake

Abraham

2019

Health Services Research

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Objective To investigate how changes in insurer participation and composition as well as state policies affect health plan affordability for individual market enrollees. Data Sources 2014‐2019 Qualified Health Plan Landscape Files augmented with supplementary insurer‐level information. Study Design We measured plan affordability for subsidized enrollees using premium spreads, the difference between the benchmark plan and the lowest cost plan, and premium levels for unsubsidized enrollees. We estimated how premium spreads and levels varied with insurer participation, insurer composition, and state policies using log‐linear models for 15 222 county‐years. Principal Findings Increased insurer participation reduces premium levels, which is beneficial for unsubsidized enrollees. However, it also reduces premium spreads, leading to lower plan affordability for subsidized enrollees. States responding to cost‐sharing reduction subsidy payment cuts by increasing only silver plans' premiums increase premium spreads, particularly when premium increases are restricted to on‐Marketplace silver plans. The latter approach also protects unsubsidized, off‐Marketplace enrollees from experiencing premium shocks. Conclusions Insurer participation and insurer composition affect subsidized and unsubsidized enrollees' health plan affordability in different ways. Decisions by state regulators regarding health plan pricing can significantly affect health plan affordability for each enrollee segment.

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“…For example, as insurance market concentration increases, hospitals may increase quality in order to increase patient pressure on the insurer to keep the hospital in‐network or to strengthen their ability to negotiate higher prices. The literature on insurance concentration and price is smaller and more recent than the literature on hospital concentration and price, but several studies have shown that concentrated insurers do negotiate lower hospital prices, but do not pass savings on to consumers in the form of lower premiums …”

Section: Introductionmentioning

confidence: 99%

Do health insurance and hospital market concentration influence hospital patients’ experience of care?

Hanson

Herring

Trish

2019

Health Services Research

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Objective To examine the effects of insurance and hospital market concentration on hospital patients’ experience of care, as hospitals may compete on quality for favorable insurance contracts. Data Sources/Study Setting Secondary data for 2008‐2015 on patient experience from Hospital Compare's patient survey data, hospital characteristics from the American Hospital Association (AHA) Annual Survey, and insurance market characteristics from HealthLeaders‐InterStudy. Study Design Hospital/year‐level regressions predict each hospital's patient experience measure as a function of insurance and hospital market concentration and hospital fixed effects. The model is identified by longitudinal variation in insurance and hospital concentration. Data Collection/Extraction Methods Hospital/year‐level data from Hospital Compare and the AHA merged by market/year to insurance and hospital concentration measures. Principal Findings Changes in patient satisfaction are positively associated with increases in insurance concentration and negatively associated with increases in hospital concentration. Moving from a market with 20th percentile insurance concentration and 80th percentile hospital concentration to a market with 80th percentile insurance concentration and 20th percentile hospital concentration increases the share of patients that rated the hospital highly from 66.9 percent (95% CI: 66.5‐67.2 percent) to 67.9 percent (95% CI: 67.5‐68.3 percent) and the share of patients that definitely recommend the hospital from 69.7 percent (95% CI: 69.4‐70.0 percent) to 70.8 percent (95% CI: 70.5‐71.2 percent). The relationship for insurance concentration is stronger in more concentrated hospital markets, while the relationship for hospital concentration is stronger in less concentrated hospital markets. Conclusions These findings add to the evidence on the harms of hospital consolidation but suggest that insurer consolidation may improve patient experience.

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More Insurers Lower Premiums: Evidence from Initial Pricing in the Health Insurance Marketplaces

Cited by 79 publications

References 18 publications

Comparing Employer-Sponsored And Federal Exchange Plans: Wide Variations In Cost Sharing For Prescription Drugs

Comparing Employer-Sponsored And Federal Exchange Plans: Wide Variations In Cost Sharing For Prescription Drugs

Individual market health plan affordability after cost‐sharing reduction subsidy cuts

Do health insurance and hospital market concentration influence hospital patients’ experience of care?

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