The Impact of Market Size and Composition on Health Insurance Premiums: Evidence from the First Year of the Affordable Care Act

Approximately eight million US residents currently obtain private health insurance cover age through one of the marketplaces created by the Affordable Care Act (ACA). Recent research has documented considerable variation across geographic areas in the number of insurers par ticipating in each market, the number of plans offered, and in the distribution of health insur ance premiums. This variation may be partially driven by characteristics such as the population, income distribution, and fraction uninsured in each market prior to the Affordable Care Act. Government regulations are also likely to affect market outcomes in the ACA health insur ance exchanges. While the ACA was passed at the federal level, state governments have been given considerable latitude to vary certain policies that regulate these marketplaces. For example, each state is allowed to decide the number of coverage regions within its marketplace and the geographic areas contained in each region. Within each region, an insurer is required to make each offered plan available to any eligible individual or family. The private marketplaces for public health insurance that existed before the ACA have