92% of Counties Have Affordable Care Act Plans with 3 to 5 Stars

Over nine in ten counties boasted a medium- or high-quality health plan as their highest-rated plan on the Affordable Care Act marketplace in 2020, according to a Health Affairs article.

Researchers used the 2020 Nationwide Quality Rating System Public Use File and premium and actuarial value data from the 2020 Qualified Health Plan Landscape Medical Individual Market File to assess quality. 

Using this data, the study covered over 38,500 health plans in  35 states, which the study referred to as the federally facilitated marketplace. None of the states were state-based marketplaces.

Most counties had medium-quality health plans as their highest-rated plans. More than six in ten counties (61.4 percent) had a three-star health plan as the highest-rated plan available on the federal health insurance marketplace.

In 31 percent of the counties, enrollees had access to high-rated health plans with four or five stars as their top-rated plans. Virginia was the only state with a five-star insurer.

A small fraction of counties had plans with only one or two stars (7.6 percent or 172 counties). West Virginia was the only state with a one-star insurer.

Enrollees were concentrated in counties that had access to three-star plans or higher-rated plans. More than half of the Affordable Care Act enrollees on the federal health insurance marketplace had access to a three-star health plan (50.5 percent). For another 46.0 percent of enrollees, the highest-rated plans that they could access had four or five stars.

The study found that counties with higher-rated plans tended to share certain characteristics. They boasted larger populations, were less likely to be rural, offered multiple insurers on the marketplace, and offered better access to care.

There did not seem to be a strong correlation between star-rating and the size of the Black and Hispanic populations in a county. But the researchers indicated that a lower median percentage of Black and Hispanic individuals existed in counties that could only access one- or two-star federal health insurance marketplace plans.

Counties with the largest Black communities were four times more likely to have high-rated health plans than counties with the smallest Black communities.

Additionally, there was no strong correlation between access to high-rated or medium-rated health plans and county residents' share of college degrees or higher incomes.

While county poverty levels did not appear to be closely tied to the presence of higher-rated health plans, the researchers found that higher-rated health plans typically cost enrollees more in monthly premiums. On average, each star added over $27 to a plan’s premium. 

One-star plans were the only exception. These plans boasted a high average monthly premium of $557. However, they were uncommon.

“Taken together, these results suggest that medium- and high-rated plans are widely available on the federally facilitated ACA Marketplace, but consumers will need to consider the potential trade-offs of quality versus premium cost,” the researchers concluded.

For policymakers, the researchers emphasized the importance of Affordable Care Act quality measures, suggested incentivizing high-quality plan selection by making highly-rated plans show up first on HealthCare.gov, and supported actions that would expand consumers’ health plan options on the federal health insurance marketplace.

Analyses like these are critical given the context of high Affordable Care Act marketplace enrollment. The Affordable Care Act open enrollment season gained 5.8 million new enrollees in 2022, bumping overall enrollment beyond historic thresholds.

Affordable Care Act marketplace growth was not restricted to the number of enrollees. Payer participation in the Affordable Care Act marketplace also increased. County-level plan offerings grew 15 percent and quadrupled the number of plans per enrollee in 2019.

Moreover, the Affordable Care Act marketplace saw a higher number of Black enrollees during the special enrollment period, potentially making bolstering the federal health insurance marketplace a vital health equity measure.