title: More choice in health insurance marketplaces may reduce the value of the subsidies available to low-income enrollees.
abstract: Federal subsidies available to enrollees in health insurance Marketplaces are pegged to the premium of the second-lowest-cost silver plan available in each rating area (as defined by each state). People who qualify for the subsidy contribute a percentage of their income to purchase coverage, and the federal government covers the remaining cost up to the price of that premium. Because the number of plans offered and plan premiums vary substantially across rating areas, the effective value of the subsidy may vary geographically. We found that the availability of more plans in a rating area was associated with lower premiums but higher deductibles for enrollees in the second-lowest-cost silver plan. In rating areas with more than twenty plans, the average deductible in the second-lowest-cost silver plan was nearly $1,000 higher than it was in rating areas with fewer than thirteen plans. Because premium costs for second-lowest-cost silver plans are capped, deductibles may be a more salient measure of plan value for enrollees than premiums are. Greater standardization of plans or an alternative approach to calculating the subsidy could provide a more consistent benefit to enrollees across various rating areas.
authors.affiliation: Erin A. Taylor is an associate policy researcher at the RAND Corporation in Santa Monica, California.
authors.forename: Erin A
authors.initials: EA
authors.lastname: Taylor
authors.affiliation: Evan Saltzman is a doctoral student in the Department of Healthcare Management, Wharton School, University of Pennsylvania, in Philadelphia.
authors.forename: Evan
authors.initials: E
authors.lastname: Saltzman
authors.affiliation: Sebastian Bauhoff is an associate economist at the RAND Corporation in Arlington, Virginia.
authors.forename: Sebastian
authors.initials: S
authors.lastname: Bauhoff
authors.affiliation: Rosalie L. Pacula is a senior economist at the RAND Corporation in Santa Monica.
authors.forename: Rosalie L
authors.initials: RL
authors.lastname: Pacula
authors.affiliation: Christine Eibner (eibner@rand.org) is a senior economist at the RAND Corporation in Arlington.
authors.forename: Christine
authors.initials: C
authors.lastname: Eibner
mesh_terms: D003669:Deductibles and Coinsurance / Q000191:economics*; D005380:Financing, Government / Q000191:economics*; D059033:For-Profit Insurance Plans / Q000191:economics* / Q000706:statistics & numerical data*; D062265:Health Insurance Exchanges / Q000191:economics*; D006801:Humans; D007341:Insurance / Q000191:economics*; D007342:Insurance Benefits / Q000191:economics / Q000706:statistics & numerical data; D018854:Managed Competition / Q000191:economics*; D058991:Patient Protection and Affordable Care Act / Q000191:economics*; D011203:Poverty / Q000191:economics*; D014481:United States
keywords: Health Reform; Insurance Market < Insurance; Managed Competition