Marketplace Competition & Insurance Premiums in the First Year of the Affordable Care Act

A report funded by the Robert Wood Johnson Foundation examines marketplace competition and variation in insurance premiums across 10 select states, finding that premiums are generally higher in less competitive markets.

The report’s Urban Institute authors find that premiums depend largely on provider and insurer markets, especially when a state is dominated by one major insurer. Of the 10 states examined, Alabama, Arkansas, Rhode Island, and West Virginia had fairly limited competition with a Blue Cross Blue Shield plan dominating the market—making it more challenging for other insurance carriers to compete.

Alternatively, Colorado, Maryland, Massachusetts, New York, Oregon, and Virginia were very competitive markets, especially in highly populated urban areas.