NATIONAL BUREAU OF ECONOMIC RESEARCH

# Ami Ko

Georgetown University
Department of Economics
3700 O st NW, ICC 557
Washington DC 20007

E-Mail:
Institutional Affiliation: Georgetown University

## NBER Working Papers and Publications

 October 2018 Partial Rating Area Offering in the ACA Marketplaces: Facts, Theory and Evidence with Hanming Fang: w25154 In the health insurance marketplaces established by the Affordable Care Act (ACA), each state is divided into a set number of geographic rating areas." The ACA mandates that an insurer price its health insurance plan uniformly in all counties within the same rating area, conditional on insurees' age and smoking status. However, the ACA does \textit{not} require that an insurer sell its plan in all counties in a rating area. Using the federal marketplace data, we quantify the prevalence of a phenomenon, which we refer to as partial rating area offering, where insurers enter some but not all of the counties in a rating area. To understand why insurers selectively enter a subset of the counties in a rating area, we develop a simple model of insurer competition. The model implies that if co...

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