Distance and Networks: A Regional Analysis of Health Insurance Marketplaces
As of the fourth year of implementation of Health Insurance Marketplaces created by the Patient Protection and Affordable Care Act of 2010 (ACA), one characteristic is consistently evident in the data on issuer participation, numbers of plans available, premiums charged, and enrollment: there is a significant amount of geographic variation, both in terms of region of the country and in terms of rural and urban status of the place. The purpose of this paper is to examine whether rating area design and network adequacy standards may have contributed to HIMs' success, in terms of enrollment and/or affordability, or lack thereof in rural places. Using 2015-16 data on insurance issuer (or "firm") participation, premiums, and enrollment success for 15 Midwestern states, we examine the possibility that geographic distance to care plays a role in this variation through its effect on network adequacy from several angles and attempts to assess the moderating role that state-level policies on network adequacy standards and Rating Area design may have.
Our findings are weak and often inconclusive: in certain cases when long travel times and distances are in play, network adequacy standards may prompt a firm to stay out of a particular rural county, even when it offers plans in a nearby urban area, but for the most part it does not seem to make firm absence much more likely; the relationship between the average premiums in a county and the degree of alignment of the county's rating area with its service delivery region - which is a proxy for the firm's potential difficulty in forming networks - is not uniform and is of small magnitude; and there is no clear relationship between enrollment growth rates between 2015 and 2016 and whether a county's rating area is well-aligned with the service delivery region. We did find that premiums are highest, on average, in counties within states that subject all marketplace plans to quantitative network adequacy standards and in counties in which over 60 miles or 60 minutes of travel is needed to access a county with 50 or more doctors. Also, our findings suggest that the size of the market available for pooling or sharing risk can be a significant factor on the number of firms offering coverage.