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Rural-Urban Differences in Insurer Participation for Marketplace-Based Coverage

Abraham, J., Drake, C., McCullough, J.S., Simon, K.

The purpose of this policy brief is to:

  1. Identify differences between rural and urban counties in the number of Federally Facilitated Marketplace (FFM) insurers available to consumers.
  2. Examine variation in the composition of insurers serving counties, focusing on group affiliation (e.g., Blue Cross Blue Shield, UnitedHealthCare, Humana, Cigna, Aetna) and ownership status.

The Patient Protection and Affordable Care Act of 2010 (ACA) creates organized Marketplaces through which subsidized private insurance can be purchased by individuals who lack access to public or affordable employer coverage. Insurers’ decisions to offer Marketplace plans in local markets (e.g., counties) have direct implications for the number and types of plans offered and premiums. 

Key Findings:

  • For the 2015 plan year, 852 (34%) counties in states affiliated with the Federally Facilitated Marketplace had two or fewer insurers selling qualified health plans; of these, 80.5% were rural.
  • Insurers selling Marketplace-based coverage in rural counties are more likely to have mutual or other (non-profit) ownership versus for-profit ownership.
  • Rural and urban counties with only one insurer are most often served by Blue Cross Blue Shield (BCBS).
  • Increasing empirical evidence suggests that Marketplace premiums are higher in markets with fewer insurers, all else equal. Therefore, policymakers may want to consider additional strategies to encourage insurer participation, weighing new costs associated with policy interventions against the value generated from additional insurers, such as additional plan choice and lower premiums.

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