Competition matters for markets…even health care markets. A paper by Van Parys (2018) relies on a database of plan premium and market characteristics among states with federally-facilitated health insurance exchange Marketplaces. In this analysis, she finds that:
In 2018, Marketplace premiums were 50 percent ($180) higher, on average, in rating areas with monopolist insurers, compared to those with more than two insurers. This was driven by large premium increases for the monopolist insurers’ lowest-cost plans.
Medicaid expansion states and states with a metropolitan area had relatively lower rates, but states with a duopoly (or especially a monopoly) had they highest increase in premiums.
- Van Parys, Jessica. ACA Marketplace Premiums Grew More Rapidly In Areas With Monopoly Insurers Than In Areas With More Competition. Health Affairs. 37, NO. 8 (2018): 1243–1251.