Competition and Market Structure
A large literature studies how competition among insurers shapes premiums, plan offerings, and consumer outcomes in health insurance markets. While standard economic intuition suggests that increased competition should lower prices, identifying these effects empirically is challenging in health insurance due to regulation, benefit standardization, and interactions with provider prices. As a result, much of the empirical literature focuses on isolating plausibly exogenous variation in market structure and examining how insurer concentration and entry affect equilibrium premiums and plan characteristics.
One strand of this literature examines the relationship between insurer concentration and premiums. Empirical evidence shows that more concentrated insurance markets tend to have higher premiums, though the magnitude of these effects depends on market definition and institutional context. These studies emphasize that insurer market power is an important determinant of prices, even in settings with substantial regulation (Dafny, Duggan, and Ramanarayanan (2012); Ho and Lee (2017)).
More recent work highlights that competition can also operate along non-price margins, including plan design and networks, suggesting that the effects of competition may extend beyond premiums alone. Together, this literature provides a foundation for understanding when and how insurer competition delivers consumer benefits in health insurance markets.
Potential papers for presentation today include
- Dafny, Duggan, and Ramanarayanan (2012) — insurer concentration and health insurance premiums
- Ho and Lee (2017) — competition, plan design, and non-price margins