Increased Insurer Participation in the Individual Market Benefits Consumers


While federal policymakers have spent years in heated debate over the future of the Patient Protection and Affordable Care Act (ACA), state legislatures have made steady progress shoring up their individual markets. Kaiser Health News reports that California, in particular, has seen great success persuading insurers to return to the state’s individual market by enacting commonsense policy reforms. California has seen insurer participation increase for the past two years, and premiums are only expected to rise by 0.8 percent next year. To achieve this, California lawmakers have supplemented federal tax credits with state-funded tax credits and imposed its own individual mandate after Congress zeroed-out the ACA’s individual mandate. This is a boon for consumers, as additional competition in the individual market leads to more affordable premiums. Insurers returning to the individual markets is a welcome development, as the average number of insurers in ACA marketplaces has dropped to 3.5 last year.

Researchers at the Urban Institute have quantified just how much competition in the individual markets help consumers afford their health coverage. In 2017, the published a study that compared monthly ACA premiums in areas with fewer insurers against ACA premiums in areas with more insurers. The study found that, in areas with one insurer, premiums averaged $451 a month, while areas with six or more insurers averaged $270 a month.


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