The average premium for ACA marketplace coverage dipped 1.8% in 2022 compared with the prior year, an analysis from the Urban Institute, funded by the Robert Wood Johnson Foundation, found.

It’s the third consecutive year average ACA premiums declined, bucking the trend of sustained increases for job-based coverage, which provides insurance to a majority of nonelderly Americans.

Most states saw declines in premiums, though premium prices varied considerably from state to state, influenced by a handful of factors, including the number and type of insurers in a market

A record number of Americans purchased insurance coverage through the ACA marketplace this year, in part thanks to federal relief funds that made coverage more affordable for millions of people.

Roughly 14.5 million people enrolled in coverage for the 2022 calendar year, 21% more people than the year prior, regulators announced last month.

The type of insurers entering and competing in a market have a significant effect on premiums.

Researchers found that when a Medicaid insurer is present in a market, premiums tend to be lower either because they target inexpensive markets or have narrow networks and lower provider payment rates. A Medicaid insurer refers to carriers whose core business is to contract with states to provide Medicaid coverage, including payers like Centene and Molina.

In response to Medicaid insurers “other insurers have been forced to negotiate more favorable provider payment rates or narrow their own networks,” the report said.

The number of competing insurers in a market is also an important factor for premiums.

Areas with only one insurance carrier tend to have higher premiums, as much as $190 more per month, compared to areas with five or more insurers.

Higher premiums were also recorded in areas with higher unemployment rates, which researchers used as a proxy for the severity of COVID-19 outbreaks.