More Americans are seeing more options—and lower premiums—when shopping for Obamacare policies, but rural residents, particularly those in the South, are being left behind.

The difference in premiums can be significant: typically $376 a month for a 40-year-old nonsmoker in areas with the most competition compared with about $592 a month in areas with the least competition, according to a report released March 21 by the Urban Institute.

The lack of competition among insurers in sparsely populated areas, heavily...