What Is The Underlying Factor Behind The Utilization Of The Health Insurance Marketplaces?

In 2010 we saw the implementation of the ACA, which introduced health insurance marketplaces to the american public. The marketplaces were created to simplify the insurance purchasing process for all, as well as increase competition among the insurance providers. The marketplaces are stable, predictable, and less risky than the pre-ACA health insurance marketplaces. Adverse selection is a key underlying factor behind the underutilization of the health insurance marketplaces, and both can be attributed to preventing said marketplaces from serving their purpose. One of the innate problems in healthcare around the world, is adverse selection. The term describes the increased willingness to purchase health insurance, only when one is sick or injured. This ultimately increases costs for everyone who wants to use

This utilization creates a fierce marketplace for competition where the insurance providers are fighting each other for customers and customers are trying to find the lowest prices and best quality. However, as it turned out in the initial test for these marketplaces in Massachusetts in 2006, no one wanted to buy health insurance still! This was a state offering health insurance in an easy to use and understand marketplace, and still no healthy people wanted to buy it because, well, they were healthy so they didn’t think they needed it. Even worse for the insurers, they noticed price increases were driven by “consumers coming in and out of the exchange system to use medical services” (Matthews and Armour 2015). This short term enrollment was seen as a problem because some high cost patients were buying temporary insurance for expensive procedures, such as orthopedic surgery, and then dropping the insurance shortly thereafter. Reports found that similar short term enrollment issues are occuring in the ACA exchanges as