Marketplace Price Competition in 2014 and 2015

Does Insurer Type Matter in Early Performance?
A patient pays cash for services in a medical office.

Some insurers keep premiums for marketplace plans aggressively low in order to remain competitive and to attract the still growing number of people buying insurance through the marketplaces.

Researchers examined a wide array of plan data comparing the premium prices of the lowest cost silver plan—the most popular of marketplace options—by insurer across 30 states for 2014 and 2015.

The Issue

For the first two years of the implementation of the Affordable Care Act (ACA), premiums in insurance marketplaces were lower than anticipated in many areas.

Key Findings

  • National insurers have entered many more markets in the second year of the ACA, but they continue to reflect an aversion to risk by having higher than average premiums.

  • Many Blue Cross Blue Shield insurers have kept premiums comparatively low with small increases from year to year.

Conclusion

Incentives remain for insurers to offer one of the two lowest-cost silver plans. So while some will request large premium increases, others will most likely keep prices low to attract the still growing number of people buying insurance through the marketplaces.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulner­able, and strengthen the effectiveness of the public sector. For more information specific to the Urban Institute’s Health Policy Center, its staff, and its recent research, visit http://www.urban.org/policy-centers/health-policy-center.