The Affordable Care Act After a Decade: Industrial Organization of the Insurance Exchanges

The regulated insurance exchanges set up in the Affordable Care Act (ACA) were designed to deliver affordable, efficient health coverage through private insurers. It is crucial to study the complex industrial organization (IO) of these exchanges in order to assess their impacts during the first deca...

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Bibliographic Details
Published inAnnual review of economics Vol. 14; no. 1; pp. 287 - 312
Main Authors Handel, Benjamin, Kolstad, Jonathan
Format Journal Article
LanguageEnglish
Published Palo Alto Annual Reviews 01.01.2022
Annual Reviews, Inc
Subjects
adverse selection
Affordable Care Act
Health insurance
Health services
Industrial enterprises
Industrial organization
JEL D81
JEL G22
JEL I13
managed competition
Markets
moral hazard
subsidies
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Summary:The regulated insurance exchanges set up in the Affordable Care Act (ACA) were designed to deliver affordable, efficient health coverage through private insurers. It is crucial to study the complex industrial organization (IO) of these exchanges in order to assess their impacts during the first decade of the ACA and to project their effects going forward. We revisit the inherent market failures in health care markets that necessitate key ACA exchange regulations and investigate whether they have succeeded in their goals of expanding coverage, creating robust marketplaces, providing product variety, and generating innovation in health care delivery. We discuss empirical IO research to date and also highlight shortcomings in the existing research that can be addressed moving forward. We conclude with a discussion of IO research-based policy lessons for the ACA exchanges and, more generally, for managed competition of private insurance in health care.
ISSN:1941-1383
1941-1391
DOI:10.1146/annurev-economics-051420-114714