Competition and Premium Costs in Single-Insurer Marketplaces: A Study of Five Rural States

In 2017, five states--Alabama, Alaska, Oklahoma, South Carolina, and Wyoming--had only one issuer participating in their health care marketplaces, limiting consumer choice and competition among insurers.

Examine the history of participation in the individual market from 2010 (before the Affordable Care Act was enacted) to 2017, and analyze premium changes among marketplace plans.

Robert Wood Johnson Foundation's HIX Compare, which provides national data on the marketplaces from 2014 to 2017.

In 2010, the individual insurance market was already concentrated in the five study states, with Blue Cross and Blue Shield (BCBS) plans covering the majority of enrollees. By 2015, with the marketplaces in full swing, more issuers were competing in the five states. But by 2016, co-ops were facing bankruptcy and left the marketplaces in these states; and in 2017, citing large financial losses, national issuers UnitedHealthcare, Aetna, and Humana also exited, leaving only a single BCBS plan in each state. Three of the five states experienced substantially higher annual premium increases than the national average. Policy options with bipartisan support, such as resuming cost-sharing reduction payments and reestablishing reinsurance and risk corridors, could help attract new or returning issuers to marketplaces in these states.