Consumer behavior and insurer plan offering with expanded premium subsidy in U. S. individual health insurance market

TL;DR

This paper examines how consumer choices and insurer offerings in U.S. health insurance changed with expanded subsidies from 2014 to 2024.

Contribution

The study reveals how enhanced premium subsidies influenced consumer plan choices and insurer supply decisions in the U.S. individual health insurance market.

Findings

Consumers shifted toward gold plans and away from silver plans with expanded subsidies.

Insurers increased gold plan offerings in response to consumer demand.

Insurers offered more silver plans than requested and fewer bronze plans than desired.

Abstract

As the demand for individual health insurance in the U. S. ebbed and flowed between 2014 and 2024, the supply of such coverage also fluctuated accordingly, based on our descriptive analysis of enrollment data and insurer information. With the enhanced premium subsidy available since 2021, consumers were trading up and purchasing more gold plans and less silver plans. Insurers in turn offered more of the desired plans. Our results also showed that insurers offered a higher percentage of silver plans but a lower percentage of bronze plans than the consumer demanded.

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