And mrs. Clinton. If you use it, everybody will know that i was the source. And ways ve i was very worried about that. But i trusted them. Sunday night on q and a. Real j care experts recently outlined how the Affordable Care act works in their state. The Brookings Institute in washington hosted the twohour discussion on the Health Care Laws successes and failures. Good morning and thank you for coming. Welcome to this session is can which is a joint session of the Brookings Institution and the Rockefeller Institute of government. And were going to talk about the results after fivestate study on how competition is working in the Affordable Care act marketplaces. And what we might learn from this study and how we think about competition in the marketplaces Going Forward and to officially open us up. I welcome my colleague Richard Nathan from the Rockefeller Institute to the platform. Thank you, alice. I dont work at brookings so maybe i shouldnt welcome people. But i worked here 11 years, and this is a while ago, and this is one of my Favorite Places to work with colleaguees. It is pleasure today to welcome to to this conference, as alice said. The Brookings Network study of the competitiveness, she mentioned this, of marketplaces aeb Health Insurance nongroup Health Insurance marketplaces in five states. California, florida, michigan, North Carolina and texas. And we have a summary report and we have five reports almost big enough for a book from the five author groups of the individual states that i just mentioned. Each of the author of the summary report is michael more pips mike is. Mike is at texas a m, about Field Research, and this is my plug, mike he, is auj author of a widely use webd it is current, informative and helpful textbook on Health Insurance. He is my teacher. I know a lot about the subject which isnt the subject i grew up on but i learned a lot. He is the lead on our report and alice, codirector with the network on Rockefeller Institute, and head of the Rockefeller Institute is here. Worked there too. Alcisco director with me of the rockefeller brookings Field Network research and is the second author of the summary report that mike is going to present. The writing Group Includes other people. Me, and mark hall, and mark hall is here. Hes the author of the North Carolina report. You will hear from him twice. Mark is the fred d. And Elizabeth Turnage profess hor of law at Wake Forest University in North Carolina. Copies of the summary report are here today and i want to add as i tell you that,cate lin brandt and the staff of the Brookings Institution center on Public Policy research have done a wonderful job on organizing this conference and producing these reports in a report that, in a form that i think is very accessible. I hope you will download all of the reports and read the summary report. And itll be helpful and contribute in this turbulent time for Health Insurance policy making. Ive nef he seen the like of it. The five states that were studying and there are 40 states in our whole network, the five states that were studying are different. What is happening in the country, throughout the country in states that not only as states as michael wineburg our california colleague often reminds me, in local markets. Tip oneill said all politics is local. Is, he said. And indeed Health Insurance markets are local. Even within markets. There are differences that weve learned about and written about. Were out in the field, indepth, using experts, using every piece of economic demographic and he program data we can bring to bear to understand institutional change which something happens, institution change, State Government change rules, federal governments, providers change their roles. Advocates change their roles. So you need to not only know the numbers but you need to know the numbers and put them together with understanding of what is happening and implementation and thats a big subject that ill just touch on. But anyway, this is typical of american federalism. We will have a chance today to hear next from mike. Present our summary findings. And that will be followed by a panel of individual Field Researchers. What they see, what they wrote about, how their story fits in to the overall story. That panel will be moderated by my colleague, weve spent a lot of time working together, tom gates of the Rockefeller Institute. Alice will chair a second panel of National Experts on Health Insurance. People who can look at our work and help us think about what were learning. Along with two of our associates. Michael luke from colorado who is head of the Colorado Health institution which is a very strong fwrup. Many states have Health Institutes and theyre very available resources for the kind of work we do. They have all the expertise and all of the local, state and regional knowledge he to understand what is happening to any policy as it plays out in a country as big and complicated as ours with a federal structure. Our new studies focus on the changed role particularly of insurance companies. They are doing Something Different now. Youve got a moment in which they are banned from doing medical underwriting, so everyone can come in, preexisting conditions and guaranteedi guaranteed issues. It is fundamental to the Health Insurance and Health Insurance is big, if not bigger than any other sector in our economy. So for five years, i started this five years ago, and i thought i retired. My wife said, no, you really didnt, we set up the network. We have 40 issue fretd website. We have followup reports non what states decided to do. We figured most of them would say, were not letting the feds in here, were going to do it. But indeed the feds are operating most of the marketplaces. So this gets to the heart of how American Health care has changed institutionally, institutionally and relying heavily on many sources of data and many peoples expertise. We have examined 25 local markets. Five in each of the states. And you have read in them the reports. Can you read about that. So i turn next to my teacher. He will design what we have learned about competition. In local economic democratic and Financial Data and exclusive interviews with different people in different places in the world of health care in america. How have the exchanges worked . How are they working now . How are they not working . What do we know about the exchanges . That affect cost and nature of health care which of course affects millions of people who are in these mammoth systems which isnt the hole of it. Theres a lot more to Health Insurance thanner what looking for to individual nonmarkets but thats where the big changes are. So mike, the platform is yours. Thank you, dick. Im delighted to be here. If i knew would you do that sort of introduction, i guess i would have prepared a mid term. What we like to do is walk you through sort of the highlights of what we have done with the five state study. As dick said, this is a team effort. It relies on alice to keep us focused and keep our feet to the fire in answering the questions we were charged with. I cant say enough about dick nathan and his ability to sort of put together a network of field rehe searchers across 40 states. Calling people up out of the blue to say, were doing this interesting project, would you like to be with us. And people have just joined right in. Then we have a strong set as indicated across all the states. So we want to describe the potential indio sin consideratic nature of the marketplaces in each of the states and it was our prezungs going in that the states were going to be very different. And thirdly how the exchanges might evolve, how they might evolve, give that informing to other researchers and serve as a roadmap for all of us as we look at repeal replace and repair. There isnt much background that i think i have to provide for this audience but there are a couple of key things that i think are worth focussing on. As we all know, aca marketplace just completed their fourth open Enrollment Period. What field investigators did is examine all of the open enrollment from the beginning through the opening of this, the fourth one. It is important to appreciate that within the aca, there are rating areas in each of the states. Rating areas are geographic areas in which, if they offer coverage in that area, must quote the same premium to people of the same age and smoking status. But the thing to appreciate is how states are configure rating their areas. Some are using metro areas are their unique rating areas and Rural Counties make up the last in the states and others use geographic sections of the state. But its important to appreciate that all of the states approach their definitions of the market somewhat differently and insurers dont have to participate in all of the rating areas more participate in all of the counties within a given rate area. It is important to appreciate just from that, that states are potentially very different and very different kind of insurance responses within the states. Because of the flexibility dwranted think about rating area approach. So why these states . We chose california because its a Democratic State that expanded medicaid. And it adopted a statebased exchange of the act of purchaser variety and the fact its the only state that has done that. We chose michigan. Its a state with Republican Leadership that expanded its Medicaid Program in late 2014. And adopted a Partnership Model of exchanges. Florida is an oppositional state that didnt expand medicaid and use he the facilitated ex he change. And the particularly interesting thing going in is that it is two states in which each county is its own rating area. North carolina, another state thats politically opposed to the aca. Didnt expand medicaid. Tutu used a federally facilitated exchange. The reason for including North Carolina is that there is early evidence there that insurers were working with local providers to cobrand product that would allow them to compete with the dominant insurers. We wanted to see how that was working out. Texas is an oppositional state. It didnt expand medicaid either. It used the federally facilitated exchange. It is one of the few states that doesnt approve premiums or for that matter assist exchanges in any way. Early evidence suggested that there was the potential at least for some substantial competition and he in some areas of the state. And so we wanted to see how that all played out. So overall we have looked for some geographical diversity. As you see from the states there is also racial and Ethnic Diversity and all of this. And we look for places where we have Strong Research teams. So weve got, what i think, is a very good set of places he to observe. A little bit on methods. Im an economist and do a lot of aggression sort of things. Field research isnt like that. Field research actually asks people who potentially know something about, and they do know, something about the questions at hand to talk to people in the communities who know something about whats going on. And so its an opportunity to sort of build on local expertise. The team developed discussion options. It looked at issues of structuring the networks within the insurer plans. And it looked at changes in the environment that potentially took place as we watch the four years unfold. But having said that, its not just sort of a set of questions that we follow by rudoute. It discusses into where the issues are from the point of view of the people on the ground. So we come away with i think a very nuanced and rich sense of what the states look like. Conducting 15 to 90minute interviews, some in person, some by phone, with Health Insurers, with Insurance Agents and brokers and navigators and with other policy experts. Sometimes the media in the states. Now of course theres a point of generalize ability here. You cant generalize from five states and in particular from five states when one of your key conclusions is they are all very different. There are a number of themes that emerge from what we found. Thats what i want to tell you a little bit about now. First as dick indicated, the key findi finding in all of this is that Health Insurance markets are local. Now ive been looking at Health Insurance markets for 20 years or more and it is only in last three, four years and certainly through the field work that weve been doing here that ive appreciated just how local these markets are. Its a mistake to sort of think of idaho as a market. A mistake to think of texas as a market. The Insurance Markets are much more local than that and what that means he is what we found is that there is a lot of divergence within states. Certainly the case that the extent of competition differers between urban settings and rural settings. But thats just the beginning of it. There are big differences between urban areas. As our individual report shows, in san, francisco it is much ls intense than it is in los angeles. Miami is much more competitive than tampa. Detroit more competitive than flint. The nuances matter and the nature of the local markets matter. And the reason they matter is because insurers, you know, are managed care entities. They form networks. And to be able to be successful in a local market, you have to have a network of hospitals and physicians and other providers who agree to prices that you believe did make you competitive. So if its the case that you cant establish a network, its, you know, well not impossible to be able to offer an insurance product in that setting. Clearly thats the case in modern america and modest urban areas. Theres a single network. Sometimes a single hospital. You decide you want to come in and compete against the dominant carrier in the state. Youve got to be able to negotiate meaningful prices with that provider. And that turns out to be difficult to do to give you a competitive advantage in the insurance side. It also turns out to be a problem sometimes in large metro areas. In texas for example we talked to one insurer who said we were pretty successful in putting together what we think was a very good network in houston. We would never get something to work in dallas. So it is not just matter of sort of we are here, in the state, and because we can provide it on the eastern side of the state we can provide it on the western too. It depend on the loek he al market. Some big impli kagcations there. It is unrealistic to expect to find results or indeed there are Similar Solutions everywhere. Second, premiums as we have found are lower in areas where there are greater numbers of hospital and other providers. Without that competition at the provider level, its difficult to see lower prices at the insurer level. And indeed we are told from our interviews that the decades of consolidation that weve seen going on in the provider market have made it difficult for insurers to compete. Having said that, if indeed these markets are local, that suggests theres opportunities for regional insurers and other insurers who cobrand with local providers to establish a successful niche in their local market where they can compete pretty successfully. Or at least we think they can. And weve seen some evidence of that. The other point though is that if indeed these market are local and they depend on the nature of those local networks of providers, that says that at least to us, that meaningful interstate Competition AmongHealth Insurers may be very difficult to achieve. Its not enough that that regulatory barriers are reduced. It is putting together the networks and thats the difficult thing. Soerkt second major finding. In the first year or two of the exchanges, the insurance have very little information. They had been insuring this pool of individuals at all. They had some information perhaps from their existing individual market. They had some information from the group market. Maybe went to a data like meps. They had little on these individuals. As a consequence a lot of them were timid about entering the market. But after that first year where they saw that premium drove enrollment and that enhe rollment was relatively low, we saw lots of new enfultry in 201. On the expectation they could experiment in the market. We saw entry and potential for real competition there. But then in 2016 rolled around and insurers had data and they believed and that data was scary. High lutization likely across board. That led to concern about high universal