Determinants of Exit: The effect of provider market structure on the probability of health insurance plan exit

One key question in studying health insurance markets is why competition is so weak. One potential explanation is that insufficient competition among doctors and hospitals presents a barrier to insurer market entry.  To test this, we exploit a regulatory change in Medicare Advantage that forced indemnity insurers to form networks de novo; we test whether provider market concentration limits entry by relating provider market structure at the county level to the decision of insurers to withdraw plans or construct networks.