When UnitedHealth Group Inc. stayed away from a state’s public health insurance exchange, the coverage sold through that exchange was more expensive.
Leemore Dafny, a management professor at Northwestern University, and two colleagues reported that observation in a paper published behind a paywall on the website of the National Bureau of Economic Research.
One of the co-authors, Jonathan Gruber, helped shape the closely watched public exchange in Massachusetts.
Economists have argued that some markets associated with health care may operate in a surprising way, with increased competition leading to higher costs.
Dafny and her colleagues tried to measure the effects of competition on prices in the Patient Protection and Affordable Care Act exchange market by looking at what happened when UnitedHealth did or did not participate in a state’s exchange.
PPACA bases calculations of federal exchange plan subsidies on the cost of each market’s second-lowest-priced silver level plan.