Texas ACA Rating Area Integration Increases Gold Plan Enrollment Without Expanding Total Coverage
In 2023, Texas restructured its Affordable Care Act (ACA) marketplace rating areas by integrating 177 rural counties into adjacent urban metropolitan rating areas, departing from its previous MSA+1 approach that aggregated all rural counties into a single rating area.
This policy change aimed to improve insurance access in rural regions by aligning them with major healthcare networks, potentially lowering premiums and expanding plan choices. Analysis of Marketplace Open Enrollment data from 2022 to 2024 indicates that both rural and urban counties saw significant growth in plan enrollment—80% in urban and 76% in rural areas—primarily driven by increased enrollment among younger adults aged 26 to 44 and those with incomes between 100% and 150% of the federal poverty level. Despite expectations, the change did not produce differential enrollment growth between rural and urban counties.
Notably, enrollees in both areas shifted toward higher actuarial value gold plans, with rural counties exhibiting a larger increase in gold plan uptake (41% compared to 32% in urban). This shift may represent improved coverage quality for rural residents who previously favored cheaper bronze options. Premium costs after subsidies declined in urban counties by 29% and slightly in rural counties by 1%, although regression analysis revealed a $16 premium increase post-subsidy in rural counties relative to urban counterparts.
The integration yielded greater plan availability and choice in rural areas without adversely impacting urban enrollment demographics or insurance market composition. Limitations include concurrent national enrollment trends driven by temporary subsidy policies and incomplete data from counties with minimal enrollment. The findings suggest that merging rural with urban rating areas in large states like Texas can sustain enrollment growth, encourage selection of more comprehensive plans, and potentially enhance insurance market function without elevating premiums significantly. Future research is recommended to evaluate impacts on health outcomes, provider network adequacy, and long-term market dynamics. Texas's approach may offer a model for other states seeking to address rural coverage disparities within the ACA framework.