Changes in Marketplace Premiums and Insurer Participation, 2022-2023

In 2023, monthly health insurance premiums for Affordable Care Act (ACA) benchmark plans increased by an average 3.4 percent.

The Issue

The increase in average premiums reverses a trend of annual premium reductions from 2019–2022, and comes despite continued growth in the number of insurers participating in ACA Marketplaces.

Key Findings

• Benchmark premiums vary considerable across states and rating regions, largely influenced by insurer competition:
  • In regions with only one insurer offering plans through the ACA, premiums were an average $128 higher than regions with five or more insurers.
  • The presence of one or more Medicaid insurers in a given region also correlated with lower increases in average premiums.
• States that expanded Medicaid eligibility requirements saw smaller premium increases.
• Competition is less robust in small cities and rural areas, which typically only have two or three insurers offering Marketplace coverage plans.
• Between 2019 and 2022, average benchmark premiums decreased by an average of 2.2 percent annually.

Conclusion

Among other factors, researchers note that persistent inflation and uncertainty regarding whether ACA’s enhanced premium tax credits would be extended served as primary drivers of the increased premiums.

About the Urban Institute

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.