Category: Health Insurance Marketplaces

State Policies on Provider Market Power

The Source is a comprehensive platform that monitors and documents various state-level activities related to healthcare prices and competition. It provides valuable resources in the form of legislation and litigation databases, which are searchable and easily accessible.

The Source is a comprehensive platform that monitors and documents various state-level activities related to healthcare prices and competition. It provides valuable resources in the form of legislation and litigation databases, which are searchable and easily accessible.

The Database of State Laws Impacting Healthcare Cost and Quality focuses on legislative measures that have an impact on the cost and quality of healthcare. This database allows stakeholders at the state level to gain insights into their legal and regulatory environment. By understanding the laws in place, these stakeholders can make informed decisions and take necessary actions to enhance access, quality, and efficiency in healthcare while also striving to reduce costs.

Additionally, The Source includes a collection of maps that offer a visual representation of notable legislation and initiatives in health policy and reform across all 50 states. These maps provide a convenient way to explore the different approaches taken by each state and the progress made in addressing healthcare challenges.

If users have specific laws or cases they are interested in, they can utilize the search functionality within the database. This feature enables targeted exploration of laws and cases pertaining to a particular state, making it easier to find relevant information.

Overall, The Source serves as a valuable tool for stakeholders involved in healthcare, providing them with the necessary information to navigate the complex landscape of healthcare legislation and policy across the United States.

Through a review of state laws, CPR found a short list of states – California, Massachusetts, Montana, New Hampshire, North Carolina, Oregon, and Rhode Island – that are particularly active in their policy efforts regarding healthcare provider consolidation and market power.

Click to access State-Policies-on-Provider-Market-Power-1.pdf

State Policies on Provider Market Power Report

The Database of State Laws Impacting Healthcare Cost and Quality (SLIHCQ)

The Source on Healthcare Price & Competition

The Source tracks state activities impacting healthcare price and competition in both legislation (The Database of State Laws Impacting Healthcare Cost and Quality) and litigation in a searchable database to help stakeholders at the state level understand their legal and regulatory environment as they make efforts to improve access, quality, and efficiency, and reduce costs in healthcare.

Browse through the maps below to find out more about notable legislation and initiatives in health policy and reform across 50 states or search the database for specific laws and cases of a particular state.

ARTICLES & REPORT

  • New Mexico Enacts HB 306 – Threading the Needle on Facility Fees
    by Anna Chau
    On March 6, 2026, New Mexico enacted HB306, the “Fair Pricing for Routine Medical Care Act”, to prohibit charging of healthcare facility fees for certain services, to require the disclosure of facility fees to patients, and to require the reporting of facility fees to the all-payer claims database.  The bill prohibits hospitals and clinics from […]
  • The Source Roundup: April 2026 Edition
    by Leelah Klauber
    Antitrust and Market Competition Playing Favorites — State Protection of Academic Medical Centers from Antitrust Oversight New England Journal of Medicine Jaime S. King, Katherine L. Gudiksen, Anna D. Sinaiko The authors explore a new trend with U.S. academic medical centers (AMCs) merging with nonacademic hospitals and health care systems.  These mergers pose risks of […]
  • Department of Justice Suit Against New York Presbyterian May Be Part of a Larger Antitrust Enforcement Trend
    by Bruce Allain, Managing Editor
    On March 26, 2026, the Department of Justice (DOJ) sued New York-Presbyterian Hospital (NYP), claiming NYP used illegal anticompetitive terms in their contracts with payors.  In the related press release, the DOJ stated that “New York-Presbyterian uses its market power to protect its margins, impede competition from rival hospitals, and prevent employers and unions from […]
  • The Source Staff Co-Author New Research on the State Protection of Academic Medical Centers from Antitrust Oversight
    by Bruce Allain, Managing Editor
    The Source’s founder Jaime S. King, and executive editor Katherine L. Gudiksen, working with Harvard’s Anna D. Sinaiko, have authored a report on state antitrust exemptions for academic medical centers (AMCs) published recently by the New England Journal of Medicine.  There is a recent history of AMCs merging with nonacademic systems, with states creating "carve-outs" to exempt AMCs from antitrust oversight.  The research […]
  • California’s Antitrust Reform Recommendation Reaches the Legislature as AB 1776
    by Kassie Williams
    Background In August of last year, The Source shared information about the California Law Revision Committee's (CLRC) antitrust study, spurred by the 2022 Assembly Concurrent Resolution No. 95. At its outset, the study aimed to address the U.S. monopoly problem and the "threat of market concentration" in California.  The legislature tasked the CLRC with determining […]
  • Anticompetitive Provider Contract Terms Come Under Fire
    by Bruce Allain, Managing Editor
    Antitrust scrutiny of anticompetitive healthcare contract terms is on the rise, and the use of anticompetitive contract terms are increasingly in the crosshairs of both regulators and courts. When healthcare systems acquire a dominant market share, one method of capitalizing on this dominance is to impose anticompetitive terms on entities they contract with for financial […]
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Improving Payment Accuracy In Health Insurance Marketplaces

In all three countries studied, risk adjustment leaves some enrollees highly underpaid and others highly overpaid. In the U.S. exchanges, for example, one in a thousand enrollees were underpaid by more than $190,000, and one in a thousand were overpaid by at least $95,000 in 2017.

Why This Study Is Important

Health insurance marketplaces that enable consumers to choose between competing health plans – such as the ACA insurance exchanges in the United States and similar national systems in The Netherlands and Germany – rely on risk adjustment to improve the accuracy of the premiums plans receive for individual enrollees. If risk adjustment is inadequate, premiums for some enrollees may fall well short of the spending plans incur for them, leaving insurers with high losses and incentives to avoid these enrollees; conversely, other enrollees may be overcompensated, with opposite effects. This study focuses on the “residual” spending differences between actual spending and risk-adjusted premiums, examines the subsets of enrollees for whom insurers are either very dramatically under-or overpaid, and demonstrates how an innovative reinsurance program could significantly improve payment accuracy.

What This Study Found

  • In all three countries studied, risk adjustment leaves some enrollees highly underpaid and others highly overpaid. In the U.S. exchanges, for example, one in a thousand enrollees were underpaid by more than $190,000, and one in a thousand were overpaid by at least $95,000 in 2017.
  • In all three countries, there is high year-to-year persistence in the individual enrollees who are either highly under- or overpaid. Such predictability can contribute to selection problems that inhibit market efficiency.
  • In all three countries, a large portion of the variance in spending that is unexplained after risk adjustment is due to the most dramatically underpaid enrollees, pointing to the chance to improve payment accuracy by focusing on this group.
  • Reinsurance that limits insurers’ current-year losses for the 1 percent of enrollees who were most underpaid in the prior year substantially improves overall risk-adjusted payment accuracy by redistributing payments from the most overpaid to the most underpaid enrollees.
  • Because these reinsurance payments affect only a very small portion of total spending and enrollees, this improvement in payment accuracy is achieved without weakening insurers’ incentives to control health care costs for their enrollees.

What These Findings Mean

Despite real differences in how the three study countries administer risk adjustments, study findings are strikingly similar across the countries. In all cases, even the sophisticated risk adjustment methods they currently use fail to accurately compensate health plans for the risks represented by specific enrollees. Large losses and large profits on certain enrollees, combined with persistence over time in which individuals are highly under- and overpaid, create incentives that work against an efficient insurance market that has robust participation by insurers and neither favors nor disadvantages individual enrollees. This study demonstrated the important payment improvements that can be achieved across the board by reinsuring against losses for the small portion of enrollees whose care is grossly undercompensated and suggests this reinsurance will not weaken plan incentives to effectively manage care for these very high cost patients.

More About This Study

This study used extensive national claims data from the three study countries to replicate the relevant risk adjustment methodology and compute residual spending amounts for individual enrollees. Health care spending and presence of diseases were examined for enrollees in the top and bottom 0.1 and 1.0 percent segments of the residual spending distribution. Year-to-year persistence of residual spending was tracked by examining the probability of remaining in the same high/low tranche from year to year and the correlation of residual spending across years. Enrollees with high residual spending in the previous year were placed in a high-risk pool that was eligible for reinsurance based on current year residual spending. The impact of such reinsurance was evaluated by considering the improvement in individual-level payment fit, the funds required for reinsurance and the share of enrollees affected.

Full Citation

McGuire TG, Schillo S, and van Kleef RC. “Very High and Low Residual Spenders in Private Health Insurance Markets: Germany, The Netherlands and the U.S. Marketplaces.” The European Journal of Health Economics, (2020). https://doi.org/10.1007/s10198…