Health Plan Payment in U.S. Marketplaces: Regulated Competition with a Weak Mandate

Timothy Layton, Ellen J. Montz and Mark Shepard

No 23444, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Affordable Care Act Marketplaces were introduced in 2014 as part of a reform of the U.S. individual health insurance market. While the individual market represents a small slice of the U.S. population, it has historically been the market segment with the lowest rates of take-up and greatest concerns about access to robust coverage. As part of the reform of the individual insurance market, the Marketplaces invoke many of the principles of regulated competition including (partial) community rating of premiums, mandated benefits, and risk adjustment transfers. While the Marketplaces initially appeared to be successful at increasing coverage and limiting premium growth, more recent outcomes have been less favorable and the stability of the Marketplaces is currently in question. In this paper, we lay out in detail how the Marketplaces adopt the tools of regulated competition. We then discuss ways in which the Marketplace model deviates from the more conventional model and how those deviations may impact the eventual success or failure of these new markets.

JEL-codes: I11 I13 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-com, nep-dcm, nep-hea and nep-ias
Note: EH PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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