The Health Affairs blog recently featured a piece by Abigail Barker, Timothy McBride & Keith Mueller of the RUPRI Center for Rural Health Policy Analysis, examining whether the health insurance market can deliver affordable health insurance options in rural areas. Can the Market Deliver Affordable Health Insurance for Rural Areas, discusses the multiple challenges that rural areas face in the successful implementation of market-based health insurance.
“Since the 1980s, public policies have used market mechanisms to motivate profit-maximizing private health insurance firms to offer coverage, a decision based largely upon economic theory suggesting that the result will be higher-quality plans at a lower cost. However, rural areas face multiple challenges to the successful implementation of market-based programs and policies, the evidence for which is noted annually both by the media and by researchers as they call attention to the lack of plan options and higher rates that often characterize rural areas. Two fundamental issues are at work in rural locations—low population density and higher average fixed costs—and they manifest as challenges in multiple ways.”