Partial rating area offering and tests for anticompetitive market segmentation in the ACA Marketplaces

To limit price variation across consumers in the Health Insurance Marketplaces, the Patient Protection and Affordable Care Act (ACA) mandates that insurance plans be uniformly priced across multiple counties within the same geographic rating area. However, the ACA does not require insurers to offer plans in every county, creating the potential for partial rating area offering. Using data from the federally-facilitated Marketplaces, we find that selective participation is both prevalent and persistent throughout the 2016–2022 period. We investigate whether this selective offering reflects anticompetitive market segmentation. In six of the seven years, the evidence is inconsistent with collusive motives. Only in 2018, a year characterized by a particularly low number of insurers with extensive multimarket contact, do we find evidence suggesting anticompetitive motives were among the drivers of selective participation within rating areas.