Provider Market Power and Adverse Selection in Health Insurance Markets: Evidence from the California Benefits Exchange

This study will use data from the Covered California benefits exchange and other sources to model the relationships between market power of dominant providers and plan prices, insurance take-up, and risk selection and to investigate how market power affects whether federal subsidies accrue to providers or enrollees. Model parameters will then be used to evaluate how policies aimed at regulating market power and prices – such as reference pricing and all-payer rate setting – would affect plan enrollment, federal spending and health care access and quality. Findings have the potential to inform state and federal policymakers seeking to ensure the smooth functioning of health insurance markets.