People standing in line at the Panorama Mall to sign-up for Covered California at an enrollment event in 2014. (Irfan Khan/Los Angeles Times via Getty Images)
People standing in line to sign-up for Covered California at an enrollment event in 2014. (Irfan Khan/Los Angeles Times via Getty Images)

Ask anyone about their health care and you are likely to hear about ailments, doctors, maybe costs and insurance hassles. Most people don’t go straight from “my health” to a political debate, and yet that is what our country has been embroiled in for almost a decade.

A study out Thursday tries to set aside the politics to examine how the insurance markets function and what makes or breaks them in five specific states.

Researchers from The Brookings Institution were exploring a basic idea: If the goal is to replace or repair the Affordable Care Act, then it would be good to know what worked and what failed.

“The political process at the moment is not generating a conversation about how do we create a better replacement for the Affordable Care Act,” said Alice Rivlin, senior fellow at The Brookings Institution, who spearheaded the project. “It’s a really hard problem and people with different points of view about it have got to sit down together and say, ‘How do we make it work?’”

The researchers focused on California, Florida, Michigan, North Carolina and Texas, interviewing state regulators, health providers, insurers, consumer organizations, brokers and others to understand why insurance companies chose to enter or leave markets, how state regulations affected decision making and how insurers built provider networks.

“Both parties miss what makes insurance exchanges successful,” said Micah Weinberg, president of Bay Area Council Economic Institute who led the California research team. “And it doesn’t have anything to do with red and blue states and it doesn’t have anything to do with total government control or free markets.”

Despite the political diversity of the five states, some common lessons emerged. Among them:

Health Insurance Markets Are Local

Insurer competition varied widely within states, with the most dramatic differences between urban and rural areas. The more populated regions tended to have more insurance competition and better-priced plans than rural areas.

Fewer people live in rural areas, which means there are fewer hospitals, doctors and other health professionals. As a result, insurance companies that do business in those regions have less power to negotiate prices with local providers, who are more likely to be the only game in town.

“Insurance companies don’t make money [in many rural areas] because they can’t cut a deal with the providers that will be attractive to the customers,” Rivlin said. “And there just aren’t very many customers, so it’s not obvious what to do about that.”

Republicans, including the Trump administration, have suggested the sale of insurance policies across state lines as one way to boost competition.

But that may be easier said than done, Rivlin said.

“The insurance companies would still have to have local providers,” she said. “So a company in New York can’t easily sell in Wyoming unless it has providers lined up in Wyoming.”

Consolidation Kills Competition

Consolidation includes hospitals buying physician practices and large medical centers…