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Rural Shoppers Face Slim Choices, Steep Premiums

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
Centers for Disease Control and Prevention
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

People living in sparsely populated areas who shopped for coverage on the state health insurance marketplaces in 2017 frequently had just one or two insurers from which to pick and often faced significantly higher premiums than did people in more urban areas, according to a new study.

As insurers finalize plans for participating in the 2018 exchanges, policy experts have speculated that the uncertainty surrounding the Affordable Care Act will lead insurers to continue to pull back from some online marketplaces or exit them altogether, leaving a growing number of people with fewer, pricier options. Insurers in most states have until mid-June to decide, but news has slowly trickled out. Aetna announced earlier this week that next year the company will not participate in the individual market in Delaware and Nebraska, the last two states in which it currently sells exchange plans.

This year, about a third of the country’s population live in areas where just one or two insurers sold policies on these ACA marketplaces, the analysis by researchers at the Urban Institute found. That included four states — Alaska, Alabama, North Carolina and Oklahoma — as well as rural areas of several others.

In regions with just one insurer, monthly premiums were $451 or higher in half of the silver “benchmark” plans on which premium subsidies are based. In contrast, in areas where six or more insurers offered plans, monthly premiums were much lower for comparable coverage: Half were $270 or less. Premium growth from 2016 to 2017 also varied substantially based on how many insurers participated in a region: Median premium growth was 30 percent in areas with one insurer versus 5 percent in regions with six or more carriers.

“All the problems seem to be very strongly correlated with the size of the population,” said Linda Blumberg, a senior fellow in the Health Policy Center at the Urban Institute, who co-authored the analysis. “If you’ve got a big population, more insurers are coming in to compete for that business.”

For the analysis, researchers analyzed the premiums for a 40-year-old nonsmoker in benchmark plans in each of the 498 premium-rating regions in the U.S.

The “rating areas” with just one or two insurers were concentrated in the South. Eighty-two percent of the rating areas with just one insurer were located in the South as were 59 percent of regions with two insurers. Regions with six or more insurers were concentrated in the Northeast, with 30 percent of the total, and the Midwest, with 41 percent.