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The Impact of Market Size and Composition on Health Insurance Premiums: Evidence from the First Year of the Affordable Care Act

Author

Listed:
  • Michael J. Dickstein
  • Mark Duggan
  • Joe Orsini
  • Pietro Tebaldi

Abstract

Under the Affordable Care Act, individual states have discretion in how they define coverage regions, within which insurers must charge the same premium to buyers of the same age, family structure, and smoking status. We exploit variation in these definitions to investigate whether the size of the coverage region affects outcomes in the ACA marketplaces. We find large consequences for small and rural markets. When states combine small counties with neighboring urban areas into a single region, the included rural markets see 0.6 to 0.8 more active insurers, on average, and savings in annual premiums of between $200 and $300.

Suggested Citation

  • Michael J. Dickstein & Mark Duggan & Joe Orsini & Pietro Tebaldi, 2015. "The Impact of Market Size and Composition on Health Insurance Premiums: Evidence from the First Year of the Affordable Care Act," American Economic Review, American Economic Association, vol. 105(5), pages 120-125, May.
    • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:120-25
    Note: DOI: 10.1257/aer.p20151083
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    References listed on IDEAS

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    1. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 977-1009, October.
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    Cited by:

    1. repec:eee:jhecon:v:57:y:2018:i:c:p:75-88 is not listed on IDEAS
    2. repec:kap:ijhcfe:v:17:y:2017:i:4:d:10.1007_s10754-017-9215-y is not listed on IDEAS
    3. Woodard, Joshua, 2016. "Estimation of Insurance Deductible Demand under Endogenous Premium Rates," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236151, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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