Good morning and thank you for coming. Welcome to this session which is a joint session of the Brookings Institution and the Rockefeller Institute of government. Were going to talk about the results of a fivestate study on how competition is working in the Affordable Care act marketplaces and what we might learn from this study and how we think about competition in the marketplaces Going Forward. And to officially open us up, i welcome my colleague, richard nathan, from the Rockefeller Institute, to the platform. Thank you, alice. I dont work at brookings so maybe i shouldnt welcome people, but i worked here 11 years. It is a while ago. And this is one of my Favorite Places to it be able to work with colleagues. It is a pleasure today to welcome you to this conference, as alice said. The brookings and rock fefeller Institute FieldNetwork Study of the competitive she mentioned this competitiveness of marketplaces in Health Insurance, individual, Nongroup Health Insurance marketplaces in five states california, florida, michigan, North Carolina, and texas. And we have a summary report and we have five reports almost big enough for a book from the five authors or author groups of the individual states that i just mentioned. The author of the summary report is mike the michael morrissey. Mikes at texas a m and is the author of a wia widely used an current, of Informative Health book on insurance. He knows a lot about the subject and i learned a lot. He is the lead author of our summary report. Alice ribling who is codirector of the network with the Rockefeller Institute, tom gaye as head of the Rockefeller Institute is here. Worked there a long time, too. Alice is codirector with me of the rockefellerbrookings Field Network research, and is the second author of the summary report that mike is going to present. The writing Group Includes other people. Me and mark hall. And mark hall is here. He is the author of the North Carolina report. Youll hear from him twice. Mark is the fred d. And elizabeth turnidge professor of law at wake forest. Copies of the summary report are here today and i want to add, as i tell you that, Caitlyn Brant and the staff of the Brookings Institution center on Public Policy research have done a wonderful job on organizing this conference and producing these reports in a form that i think is very accessible. I hope youll download all the reports and read the summary report and it will be helpful and contribute in this turbulent time for Health Insurance policy making. The five states that were studying and there are 40 states in our whole network. The five states were study iin are different. The story of what is happening in the country, throughout the country, in states that not only in states as michael weinberg, our california colleague often reminds me, in local markets. Tip oneill said all politics is local. And indeed Health Insurance markets are local. Even within markets there are differences that weve learned about and weve written about. Were out in the field, indepth, interviewing experts, using every piece of economic, demographic and program data we can bring to bare to understand institutional change when something as big as this happens, institutions change. Governments change their roles. State governments. Federal governments. Health insurers change their roles. Providers change their roles. Advocates change their roles. So you need to not only know the numbers, but you need to know the numbers and put them together with understanding of what is happening in implementation. Thats a big subject that i wills just touch on. But anyway, this is typical of american federalism. We will have a chance today to hear next from mike to present our summary findings. And that will be followed by a panel of individual Field Researchers. What they see, what they wrote about, how their story fits in to the overall story. That panel will be moderated by my colleague we spent a lot of time working together tom gates of the Rockefeller Institute. Alice will chair a second panel of National Experts on Health Insurance. He people who can look at our work and help us think about what were learning, along with two of our associates. Michael luke from colorado who is head of the Colorado Health institute, which is a very strong group. Many states have health institutes. Theyre very valuable resources for the kind evof work we do because they have all the expertise and local and state and regional knowledge to understand what is happening to any policy as it plays out in a country as big and complicated as ours with a federal structure. Our new studies focus on the changed role particularly of insurance companies. Theyre doing Something Different now. Ufzs youve got a moment in whicher that banned from doing medical underwriting so everybody can come in. Preexisting conditions. And guaranteed issue. Thats fundamental to the Health Insurance and Health Insurance is as big, if not bigger, than any other industry and sector in our economy. So weve been, for five years i started this five years when i thought i retired. My wife said, no, you really didnt. Set up this network. We have 40 people on the Rockefeller Institute website. Bob bullock from the Rockefeller Institute is here. Weve issued 27 baseline and followup reports on what states decided to do. We expected most of them would say, were not letting the feds in here. Were going to do it. But indeed, the feds are operating most of the marketplaces. So this gets to the heart of how American Health care has changed institution institutionally and relying heavily on many sources of data and many peoples expertise. Weve examined 25 local markets. Five in each of the states. You can read about them in the reports. So i turn next to my colleague, mike morrissey, and my teacher. He will describe what we have learned collaboratively about Health Insurance, market competition, based, as i said, on closely examining national, state and local economic, demographic and Financial Data and extensive interviews with different people in different places in the world of health care in america. How have the exchanges worked . How are they working now . How are they not working . What do we know about the exchanges that affect the cost and character of health care which most of all, of course, affects millions of people who are in these mammoth systems, which isnt the whole of it. There is a whole lot more to Health Insurance than what we are looking at, individual, nongroup markets. Mike, platform is yours. Thank you, dick. Im blighted to be here. If i knew you were going to do that sort of introduction, i guess i would have prepared a midterm for you. What wed like to do is walk you through some of the highlights of what weve done with the fivestate study. As dick has indicated, this is a really a team effort. I have to say, it really sort of relied heavily on alice riblings ability to sort of put all of this together and keep us focused and keep our feet to the fire in answering questions that we were charged with. I cant say enough about dick nathan and his ability to sort of put together a network of Field Researchers across 40 states, calling people up out of the blue to say were doing this interesting project, would you like to be with us. And people have just joined right in. And then weve got a really strong set of field investigators throughout these states. As dick has indicated, across all the states. So what are we about . What we want to do is begin to understand the experiences in the states and how the aca has affected the insurance exchanges in those areas. We want to describe the potentially idiosyncratic nature of the marketplaces in each of the states, and indeed it was our presumption going in that the states were going to be very different. Thirdly, we want to develop h h hypotheses about how the exchanges have evolved and how they might evolve and to offer those as testable opportunities to other researchers, but also to perhaps sort of serve as a road map for all of us as we look at repeal, replace and repair. There isnt much background that i think i have to provide for this audience, but there are a couple of key things that i think are worth focusing on. As we all know, the aca marketplace has just completed their fourth open Enrollment Period. What our field investigators did was to examine all of the open Enrollment Periods from the beginning through the opening of this, the fourth one. Its important to appreciate that within the aca, there are rating areas in each of the states. Rating areas are geographic areas in which an insurer, if they offer coverage in that area, must quote the same premium to people of the same age and smoking status. But the thing to appreciate is the states are very different in how they configured their rating areas. Some use individual counties. Others, metro areas, are have unique rating areas and the Rural Counties make up last rating areas in the state. Others use geographic sections of the state. But it is important to appreciate that all of the states approach their definitions of the market somewhat differently. And it is important to appreciate that insurers dont have to participate in all of the rating areas, nor do this he have to participate in all of the counties in the given area. It is important to note that states are very important and very different kinds of insurance responses within the states because of the flexibility thats granted by this rating area approach. Why these states. We chose california because its a Democratic State that expanded medicare and it adopted a statebased exchange of the active purchaser variety and in fact it is the only state that has done that. We chose michigan. It is a state with Republican Leadership that expanded its Medicaid Program in late 2014 and adopted a Partnership Model of exchanges. Florida is an oppositional state that didnt expand medicaid and used the federally facilitated exchange. The particularly interesting thing theyre going in is it is 1 of 2 states in which each county is its own rating area. North carolina. Another state that was politically opposed to the aca. It didnt expand medicaid. The reason for wanting to include North Carolina is there was early evidence there that insurers were working with local providers to cobrand products that would allow them to compete with a dominant insurer. We wanted to see how that was working out. Texas is indeed an oppositional state. It didnt expand medicaid, either. It uses the federally facilitated exchange. Its also one of the few states that doesnt approve premiums or, for that matter, assist the exchanges in essentially any way. Early evidence though suggested that there was the potential at least for some substantial competition in some areas of the state. So we wanted to see how that all played out. Overall we looked for some geographical diversity. As you see from the states, theres also some racial and Ethnic Diversity in all of this. And we look for places where we have Strong Research teams. Weve got what i think is a very good set of places to observe. A little bit on methods. Im an economist and do a lot of regression kinds of things and a lot of policy analysts do that same sort of thing. Field research isnt like that. Field research actually asks people who potentially know something and indeed do know something about the questions at hand to talk to people in the communities who know something about whats going on. And so its and opportunity to sort of build on local expertise. The team developed a series of discussion questions. They focused on participation and withdrawal from the markets. It looked at issues of structuring theness works within the ensurer plans and it be looked at changes in the environment that potentially took place as we watched the years unfold. Having said that, it is just a set of questions that we follow by route. It is a more fluid that discussion that follows from the discussion that precedes it into where the issues are from the point of view of the people on the ground. We come away with i think a very nuanced and rich sense of what the states look like. The field teams conducted 15 to 90minute interviews, some in person, some by phone. With Health Insurers, are providers and providers networks, with state insurance regulators, with Insurance Agents and brokers and with navigators and with other policy experts. Sometimes the media in the states. Now of course there is a point of generalize ability here. You cant generalize from five states. Particularly when one of your key conclusions is theyre all very different. There are of course though a number of themes that emerge from what we found. Thats what i want to tell you a little bit about now. First, as dick indicated, the key finding in all of this is that Health Insurance markets are local. Ive been looking at Health Insurance markets for 20 years or more. Its only in the last three, four years and certainly through the field work that weve been doing here that ive appreciated just how local these markets are. It is a mistake to sort of think of idaho as a market. It is a mistake to think of texas as a market. The Insurance Markets are much more local than that. What that means is what we found is that there is a lot of divergence within the states. Certainly it is the case that the extent of competition differs between urban settings and rural settings. But thats just the beginning of it. There are big differences between urban areas. As our individual state reports show, it turns out, for example, that the nature of insurance competition in San Francisco is much less intense than it is in los angeles. It is the case that miami is much more competitive than tampa. That detroit is more competitive than flint. The nuances matters and the nature of the local markets matter. And the reason they matter is because insurers are managed care entities. They form networks. And to be able to be successful in a local market, you have to have a network of hospitals and physicians and other providers who agree to prices that you a believe can make it competitive. If it is the case that you cant establish a network, its well, not impo to well, almost impossible to offer insurance in that setting. Clearly thats the case in lots of rural america, its also the case in modest size urban areas. Theres a single network. Sometimes a single hospital. You decide you want to come in and compete against the dominant carrier in the state, youve got to be able to negotiate meaningful prices with that provider. That turns out to be difficult to do to give you a competitive advantage in the insurance side. It also turns out to be a problem sometimes in large metro areas. In texas, for example, we talked to one insurer who said, we were pretty successful in putting together what we think was a very good network in houston but we could never get something to work in dallas. So it is just a matter of sort of we are here, were in the state and because we can provide it on the eastern side of the state, we can provide it on the western, too. It depends on the local market. It is unrealistic to expect to find similar results or Similar Solutions everywhere. Second, premiums as we have found are lower in areas where you have greater numbers of hospital and other providers. Without that competition at the provider level, it is difficult to see lower prices at the insurer level. Indeed, we have been told from our insurance views that the decades of consolidation that weve seen going on in the provider markets have made it difficult for insurer to comp e compete. Having said that, if indeed these markets are local, that suggests that there is opportunities for regional insurers and other insurers who cobrand with local providers to establish a successful niche in their local market where they can compete pretty successfully, or at least we think they can. Weve seen some evidence. The other point though is if indeed these markets are local and they depend on the nature of those local networks of providers, that says that at least to us that meaningful interstate Competition AmongHealth Insurers may be very difficult to achieve. It is not enough that regulatory barriers are reduced. Its putting together the networks, and thats the difficult thing. Second major finding. Claims costs substantially exceeded the insurers expectations. In the first year or two of the exchange, the insurers actually had very little informati