Working Paper: NBER ID: w20907
Authors: Michael J. Dickstein; Mark Duggan; Joseph Orsini; Pietro Tebaldi
Abstract: Under the Affordable Care Act, individual states have discretion in how they define coverage regions, within which insurers must charge the same premium to buyers of the same age, family structure, and smoking status. We exploit variation in these definitions to investigate whether the size of the coverage region affects outcomes in the ACA marketplaces. We find large consequences for small and rural markets. When states combine small counties with neighboring urban areas into a single region, the included rural markets see .6 to .8 more active insurers, on average, and savings in annual premiums of between $200 and $300.
Keywords: Health Insurance; Affordable Care Act; Market Size; Insurance Premiums
JEL Codes: I11; I13; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| bundling small and rural counties with larger urban areas (R59) | increase in the number of insurers (G52) |
| bundling small and rural counties with larger urban areas (R59) | decrease in annual premiums (G52) |
| size of coverage regions (R12) | market outcomes (P42) |
| size of coverage regions (R12) | number of active insurers (G22) |
| size of coverage regions (R12) | annual premiums (G52) |
| heterogeneous regions (R12) | worse market outcomes (D52) |