NEJM: MPH’s Graves’ finds smaller insurers earning profits in new market
“Success and Failure in the Insurance Exchanges,” a New England Journal of Medicine “Perspectives” article released this week, examines whether the financial struggles of some major insurers under the Affordable Care Act (ACA) reflect a policy failure that should be addressed via repeal or reform, or a mismatch of these firms’ capabilities and strategies to a newly created market.
The authors — Craig Garthwaite, Ph.D., Kellogg School of Management at Northwestern University, and John Graves, Ph.D., Vanderbilt University Medical Center — estimated that the number of insurers offering plans on the exchanges fell by nearly half between 2016 and 2017. Yet the authors also show that “patterns of market entry and exit are consistent with natural competitive pressures separating out firms best suited for success” in the ACA’s nascent markets.