What happens when health plans compete

The New York Times, September 2, 2014
As a candidate in 2008, President Obama promised that health reform would reduce family premiums by up to $2,500, equivalent today to about a 15 percent reduction from the 2013 level. Though Mr. Obama might have been including the effects of premium subsidies in his calculation, a key premise of the Affordable Care Act is that competition among health insurers will drive premiums downward. So it's worth asking: How much savings can additional competition produce? The most direct answer to this question comes from analysis by Leemore Dafny and Christopher Ody of Northwestern University and Jonathan Gruber of M.I.T.

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