Study finds reasons for lack of health-insurance competition, high cost in rural America; story has link to interactive map

Map by The Daily Yonder with data from Kaiser Family Foundation; for an interactive version click here.

A key goal of the Patient Protection and Affordable Care Act — to increase access to health insurance by fostering competition among insurance companies — is not as effective in rural America as it is in metropolitan areas, a new study finds.

The impact of market-focused strategies is diminished by the lack of competition among health insurers in rural areas, Liz Carey reports for The Daily Yonder. And rural areas are less competitive in the insurance market because of many complex factors – not just population density, the study concluded. The study could be valuable to policymakers who need a better understanding of how rural markets work. The Yonder has an interactive, county-by-county map.

The study by the Institute for Rural Health Policy Analysis in the Rural Policy Research Institute “looked at insurer participation data across three market-based health insurance programs — the Federal Employees Health Benefits Program Medicare Advantage and Health Insurance Marketplaces (HIMs, which the Affordable Care Act created),” Carey writes.

The researchers wanted to see if competition affected decisions to purchase health insurance. “The study found that, in areas that had been dominated by a smaller number of insurers in the past, the Affordable Care Act’s health-insurance marketplaces for individual policies had lower enrollment.” Population density alone does not lower health-insurance enrollment, but an area’s previous lack of competition did predict lower enrollment rates.

Abby Barker of the Rural Policy Research Institute, told the Yonder, “I think you could say that population density, and some of those other population-related measures … are expected to be significant. But what we added is this measure of competition that shows that another explanatory factor is how concentrated the market is and has been over time. The methods don’t really identify which is more important, but the contribution of this work is to say that prior market concentration matters. In my view, it suggests that policies that rely on competition to achieve certain access/affordability goals, really have to be intentional about overcoming this sort of inertia that tends to exist. Once certain insurance issuers are established in a particular geographic region, it’s a little harder for new ones to come in.”