ACA Marketplace: The More The Insurance Options, The Higher The Costs
According to the RAND Corporation, having more health plan choices may not always be better for people who are planning to buy subsidized coverage through marketplaces that were created under the Affordable Care Act.
As stated by the RAND Corporation, consumers who used government subsidies to buy coverage in marketplaces where there was significant competition faced higher deductibles than peers who bought policies in regions where there were fewer plans offered. People who live in areas with more plan offerings may have to pay a higher premium to receive the same deductible when compared to people living in areas with fewer plan offerings.
The researchers say that their findings may be the result of health insurers working aggressively to create a discount-price product that can compete in marketplaces based primarily on the premium cost.
Also, their findings has led to several possible policy suggestions which give options such as limiting the number of health plans offered through the marketplaces and requiring equivalent cost-sharing terms for all plans within a given metal tier, an approach being used by some state-run marketplaces.
Other options also include the alteration of how the government subsidies are being offered to the consumers by either increasing the value of the subsidies or further subsidizing the cost of health insurance in markets where there is significant competition among the buyers.
People with subsidies can also buy more-generous plans, such as those in gold or platinum tiers, but they should also pay the difference in the cost between their choice and the premium of the second-lowest-cost silver plan.
In order to assess whether the effective value of subsidies varies geographically, RAND researchers evaluated the cost and coverage provided in marketplaces across the nation as of May 2014. That included marketplaces operated by or with the federal government, as well as those run by states.