Impact of National Health Reform and State-Based Exchanges on the Level of Competition in the Nongroup Market

One of the objectives of the Affordable Care Act (ACA) reform of the nongroup insurance market, including new market and rating rules and reliance on public health insurance exchanges, is to enhance competition. More competing health plans increases consumer choice, as well as the market pressure on health plans to manage administrative costs, improve their service and contract with clinical providers at optimal rates. Especially in the context of health plans contracting selectively with providers in order to hold down payment rates, a choice of more health plans serves consumers well and signals a vibrant market. This brief, prepared by Wakely Consulting Group, provides an early indicator of the level of competition among health insurers that market reforms and state-based exchanges are generating.