ACA Exchange Competitiveness in North Carolina

• Published date: 01 September 2017
• Author: Mark A. Hall
• Date: 01 September 2017
• DOI: http://doi.org/10.1111/rmir.12076

Risk Management and Insurance Review

C

2017 The Brookings Institution. Risk Management and Insurance Review C

2017 The American Risk

and Insurance Association, 2017, Vol. 20, No. 2, 233-247

DOI: 10.1111/rmir.12076

PERSPECTIVE

ACA EXCHANGE COMPETITIVENESS IN NORTH CAROLINA

Mark A. Hall

ABSTRACT

North Carolina is a populous state (10 million) with lower-than-average income

(42nd nationally) and a historically high uninsurance rate (6th nationally). Thus,

the state had a large number of potential new applicants eligible for subsidized

coverage, and in fact has achieved the fourth highest exchange enrollment in

the country (approximately 600,000). North Carolina is also notable for being

the second largest state to have only one carrier statewide—Blue Cross and Blue

Shield of North Carolina.

North Carolina has had sharply changing market conditions on the health insurance

exchanges during the first years of the Affordable Care Act (ACA). Before the ACA, Blue

Cross Blue Shield dominated 86 percent of the market, but Aetna and UnitedHealthcare

provided competition in the first years of the exchanges.

However, due to (1) difficulties projecting claims costs, (2) failure to expand Medicaid,

and (3) Aetna’s and United Healthcare’s nationwide decisions to leave most exchanges,

competition declined in 2017. Prior to the 2017 election, many were hopeful that this

would be a temporary decrease, with new insurers potentially entering the market to

compete with Blue Cross, perhaps as an adjunct to the state’s recentadoption of managed

care for Medicaid.

North Carolina has also had some of the highest premium increases in the country, due

both to reasons listed above and to the high concentration of provider systems in many

parts of the state, along with overall poor health status of North Carolina residents.

This article proceeds as follows. The next section presents background information im-

portant for understanding how North Carolina operates compared to other states. The

“New Developments Entering the Fourth Open Enrollment Period” section presents

new developments entering the fourth enrollment period. The “Selection of Study Lo-

cations” section describes the process for selecting the sites for this study, and the

“Methodology” section describes the study methodology. The findings of the study are

Mark A. Hall is Professor of Law and Public Health and Director of the Health Law and Policy

Program at WakeForest University. He can be contacted via; e-mail: hallma@wfu.edu. Katherine

Booth assisted Professor Hall with this work.

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