Cross-Cutting Issues: Plan Participation in Health Insurance Exchanges

This report by the Robert Wood Johnson Foundation report, prepared as part of its Affordable Care Act (ACA) Implementation—Monitoring and Tracking Series, examines how insurance competition within exchanges is likely to play out in 10 featured states. This report is one of a series papers focusing on ACA implementation issues in Alabama, Colorado, Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island and Virginia. 

Key Findings

  • Markets with a dominant insurer (like those in Michigan, Maryland and Alabama), and markets with many insurers but a dominant hospital system (like INOVA hospital system in Virginia), are less likely to experience insurance competition, and therefore may have higher premiums and costs as a result.

  • Markets with many insurers and many hospitals have a greater potential for competition, as insurers may attempt to offer plans with lower payment rates in an effort to obtain a position as one of the lowest-cost plans in an area.

  • The other opportunity for highly competitive insurance markets is likely to occur when Medicaid-managed care plans compete with commercial plans, as providers tend to be willing to accept somewhat lower payment rates for limited populations.