AMA finds commercial, MA markets highly concentrated among insurers

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The American Medical Association today identified the industry giants with the biggest shares of the markets for commercial health insurance, Medicare Advantage, and public health exchanges, with UnitedHealthcare and Elevance Health representing the largest insurers by overall market share.

The AMA, which weighs in on policy issues, said high levels of market concentration is leaving millions of Americans with limited competitive options for health insurance.

The 2023 edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets examined 381 metropolitan statistical areas (MSAs), the 50 states and Washington D.C., and tabulated market shares for the two largest health insurance companies. It also analyzed state and MSA-level market concentration according to measures used in current federal antitrust guidelines. Markets that exceed a regulatory threshold set by federal guidelines are considered "highly concentrated" and lack adequate health insurer competition.

"High market concentration tends to lower competition among health insurers, which can harm patients by raising insurance premiums above competitive levels," said AMA President Dr. Jesse M. Ehrenfeld. "The share of markets that are highly concentrated may be far higher than reflected under current federal guidelines." 

Ehrenfeld said the AMA supports draft federal guidelines that would lower the regulatory threshold for markets to be considered highly concentrated. 

"To reverse the trend toward health insurance consolidation, the AMA strongly supports the proposal as the proper prescription to scrutinize and potentially limit harmful insurance mergers," said Ehrenfeld.

WHAT'S THE IMPACT?

For commercial markets, under current federal guidelines, 73% (277) of MSA-level markets were highly concentrated in 2022, up from 71% in 2014. Under proposed federal guidelines, 95% (363) of MSA-level markets would be highly concentrated.

In 48% (184) of MSAs, one health insurer held a market share of at least 50%. Elevance Health (formerly Anthem) was the largest health insurer by market share in 22% (83) of MSAs, followed by Health Care Service Corp., with a market share lead in 11% (43) of MSAs, and Highmark with a market share lead in 6% (22) of MSAs.

At the national level, the 10 largest health insurers by market share were UnitedHealth Group (14%), Elevance Health (12%), CVS (Aetna) (11%), Cigna (10%), Kaiser Permanente (7%), Health Care Service Corp. (6%), Blue Cross Blue Shield of Michigan (2%), Blue Cross Blue Shield of Florida (2%), Blue Shield of California (2%) and Highmark (2%).

For Medicare Advantage markets, under current federal guidelines, 71% (271) of MSA-level markets were highly concentrated in 2022, down from 87% in 2017. Under proposed federal guidelines, 97% (370) of MSA-level markets would be highly concentrated.

In 31% (118) of MSAs, one health insurer held a market share of at least 50%. UnitedHealth Group was the largest health insurer by market share in 42% (161) of MSAs, followed by Humana, with a market share lead in 22% (83) of MSAs, and CVS (Aetna), with a market share lead in 7% (25) of MSAs.

At the national level, the 10 largest health insurers by market share were UnitedHealth Group (28%), Humana (18%), CVS (Aetna) 11%, Kaiser Permanente (6%), Elevance Health (6%), Centene Corp. (5%), Cigna (2%), Blue Cross Blue Shield of Michigan (2%), Highmark (1%) and SCAN (1%).

When it came to public health exchange markets, 90% (339) of MSA-level markets were highly concentrated in 2022, down from 95% (307) in 2014. Under proposed federal guidelines, 99% (373) of MSA-level markets would be highly concentrated. 

In 67% (254) of MSAs, one health insurer held a market share of at least 50%. Centene Corp. was the largest health insurer by market share in 15% (56) of MSAs, followed by Elevance Health, with a market share lead in 6% (23) of MSAs, and Blue Cross Blue Shield of Florida and Health Care Service Corp., each with a market share lead in 6% (21) of MSAs.

At the national level, the 10 largest health insurers by market share were Centene Corp. (14%), Blue Cross Blue Shield of Florida (9%), Kaiser Permanente (7%), Bright Health (7%), Oscar Health (5%), Elevance Health (4%), Health Care Service Corp. (4%), Blue Shield of California (4%), Blue Cross Blue Shield of North Carolina (3%) and Molina Healthcare (3%).

THE LARGER TREND

The AMA has been sounding the bell on insurer consolidation for some time, finding in an annual report last year that the majority of Medicare Advantage markets are highly concentrated, which the group said can have a detrimental effect on patients and doctors.

In that report, the AMA looked at 380 metropolitan statistical areas (MSAs) in the U.S., the AMA said MSAs tend to be dominated by one or two insurers – and while Medicare Advantage markets have become less concentrated in recent years, they're still high above the threshold for highly concentrated markets.

The decrease in average MA market concentration masks some merger activity that took place, the AMA said. Notable among these was Centene's acquisition of WellCare. Although both insurers provided MA coverage in several states prior to the merger, with a few exceptions their market shares were small and there was not a lot of significant market overlap. So, while the merger generally did not have large effects at the local level, it increased Centene's share at the national level from 1% to 4% and moved it up the rankings from 10th to sixth between 2017 and 2021.
 

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com