Trends in Market Concentration in the ACA Individual Health Insurance Markets

• In Event: Shifting Insurance Landscapes and Access to Care: Insights from Public and Private Insurance Markets

Abstract

Abstract:  The Affordable Care Act relies on managed competition among private insurers to offer health insurance to over 24 million Americans in 2025.1  Insurers have entered and exited ACA markets as expected profitability and predictability have changed over time.2,3 As more insurers enter a market, it is highly likely that gross premiums paid by non-subsidized enrollees will decrease.4  Prior research has focused on the number of insurers with evidence suggesting that markets with three or more insurers were deemed to be competitive with lower costs.5,6  However, even in  markets with three or more insurers, there is substantial variation in how much competition a market experiences as measured by the market’s Herfindahl–Hirschman index (HHI)

The average American who uses Healthcare.gov has been exposed to varying levels of actual competition in their counties. Since 2021, the enrollment weighed HHI has decreased from 4768 (se 2272) to 3852 (se 1951) in 2023 as more the average number of insurers has increased from 4.521 in 2021 to 6.598 in 2023 (p<0.001).  The range of the number of insurers has increased with a substantial increase in the number of counties with at least seven insurers (16 in 2021 to 128 in 2022). 

Understanding the competitive dynamics via enrollment will add insights on premiums and competition that prior measures of counting offering insurers may have missed.    

Authors

• David M Anderson, University of South Carolina
  Presenting Author

• Daniel Ludwinski, Emory University
  Non-Presenting Co-Author

• Sayeh S Nikpay, Vanderbilt University
  Non-Presenting Co-Author

• Ezra Golberstein, University of Minnesota
  Non-Presenting Co-Author