Study: Increased insurance broker competition drives down coverage cost

A new University of Minnesota study found that small employers are more likely to offer medical coverage in market with a higher number of insurance agents and brokers, and the increased agent/broker competition was associated with lower premiums (Source: “Brokers Associated With More, Cheaper Health Coverage, Study Says,” Kaiser Health News, Aug. 22, 2013).

According to the National Bureau of Economic Research-published study, small firms were about 20 percent more likely to offer health coverage in counties with the most brokers serving small firms than in counties with the least. The data are from 2008. In counties with the fewest brokers, the average annual premium for a single employee was $5,173. In counties with the most brokers, the annual premium was $4,495 — 13 percent less.