State Participation in Health Insurance Exchanges is Associated with Lower Premiums

The state-based and federally-facilitated Health Insurance Exchanges, a hallmark of the ACA, have already enrolled over 8 million individuals in private qualified health plans. There is significant variation in state decisions and involvement regarding the design and implementation of states’ exchanges. Using data we collected from the U.S. Department of Health and Human Services, state exchange consumer websites, and the recently released Health Insurance Exchange (HIX) Compare dataset, we examined how premiums vary with state involvement in the health insurance exchanges through exchange governance, plan management authority, and plan management strategy during the first year of the exchanges. The results of this analysis suggested that increased state engagement in the implementation and regulation of the exchange is associated with lower premiums. State-based exchanges with state authority on the plan management and clearinghouse models had the lowest premiums compared to all other exchange types. Going forward, our baseline estimates provide valuable benchmark for evaluating performance of state involvement in governance, plan management and authority.