A new study from the American Medical Association indicates that the number of metropolitan areas in which there’s little choice of health care insurers is growing.
Healthcare Finance News reports that the 2017 edition of the AMA's Competition in Health Insurance: A Comprehensive Study of U.S. Markets, which looked at market concentration in 2016, has found that in 43 percent of metropolitan areas (169 out of 389), a single health insurer had captured at least a 50 percent market share—an 8 percent increase in such concentrations in a little over two years.
According to the report, the study is “intended to help researchers, policymakers and regulators identify markets in which consolidation among health insurers may cause anti-competitive harm to patients and the physicians who care for them.” There’s less competition among commercial health insurers in high market concentrations, which then exposes those markets to insurers flexing their muscles by boosting premiums above competitive levels.
The analysis, based on 2016 data on commercial enrollment in fully and self-insured health maintenance organizations, preferred provider organizations, point-of-service, public health exchanges and consumer-driven health plans, also provides a separate examination of competition for predominant plan types, including HMOs, PPOs, POS and the exchanges.
Sixty-nine percent of metropolitan areas exhibited a significant absence of health insurer competition, and are rated “highly concentrated” based on federal guidelines used to assess the degree of competition in a market. In 43 percent of metropolitan areas, a single health insurer had at least a 50 percent share of the commercial health insurance market, compared to 40 percent in 2014, with Anthem having the biggest geographic footprint in the country.
Anthem was also the largest health insurer by market share in 82 of 389 metropolitan areas examined by the AMA. Health Care Service Corp. came in second, dominating market share in 42 metropolitan areas, with UnitedHealth Group coming in third, leading market share in 26 metropolitan areas.
According to the report, the 10 states with the least competitive markets were Alabama, Delaware, Hawaii, South Carolina, Louisiana, Michigan, Kentucky, Vermont, Alaska and Illinois. The 10 states that experienced the largest increase in market concentration were Kentucky, Alaska, South Carolina, Mississippi, South Dakota, Oklahoma, Vermont, Arkansas, Nevada and New Mexico.