AMA: Nearly three-quarters of metropolitan areas are concentrated health insurance markets
The AMA said consolidation leaves millions of Americans with more limited health insurer options.
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About 73% of metropolitan statistical areas in the U.S. are concentrated health insurance markets, meaning large health insurers control the market in nearly three-quarters of the country, according to a new analysis from the American Medical Association.
The updated study analyzed market concentration and health insurer market shares for 384 metropolitan statistical areas, the 50 states and the District of Columbia. For the first time, the study also presents national-level market shares for the 10 largest health insurers in the U.S.
The findings show most health insurance markets in the U.S. are highly concentrated, which the AMA said leaves millions of Americans with more limited health insurer options.
WHAT'S THE IMPACT?
Of the 384 MSAs, 280 were classified as highly concentrated, according to federal guidelines. Almost 180, or 46%, of the MSA-level markets had one insurer with a share of 50% or more.
Between 2014 and 2020, the share of highly concentrated markets rose from 71% to 73%, and 54% of markets that were already highly concentrated in 2014 became even more concentrated by 2020, the data showed.
The health insurers with the highest market share in the most MSA-level markets were Anthem (80 MSAs), Health Care Service Corp. (44 MSAs), UnitedHealth Group and Blue Cross Blue Shield of Florida (each with 22 MSAs), and Highmark and Kaiser (each with 20 MSAs).
The 10 states with the least competitive commercial health insurance markets were Alabama, Michigan; Louisiana, South Carolina, Hawaii, Kentucky, Alaska, Illinois, North Dakota and Oklahoma. Fourteen states had one health insurer with a share of 50% or more of the commercial health insurance market.
The 10 largest health insurers in the U.S. at the national level by market share were UnitedHealth Group (15%), Anthem (12%), Aetna (11%), Cigna (10%), Kaiser (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 Centene (2%).
Researchers said the results should raise antitrust concerns, with market consolidation continuing to be an ongoing trend. The data suggests that insurers in competitive markets are more likely to lower premiums and enhance benefits in an effort to attract more customers.
They also contend that markers dominated by a single insurer can pay physicians less, thereby impacting their business.
THE LARGER TREND
An executive order issued by President Joe Biden in July sought to crack down on hospital and health insurance consolidations, and other actions the administration said decreases competition and drives up prices.
Consolidation in the health insurance industry has meant that many consumers have little choice when it comes to selecting insurers, the order said.
Biden directed the Department of Health and Human Services to standardize plan options in the health insurance marketplace so people can comparison shop more easily. Plans offered on the exchanges are complicated by the various services offered and differences in deductibles, the order said.
The order includes 72 initiatives focused on anticompetitive practices in labor markets, agricultural markets, healthcare markets and the tech sector.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
