Health care insurance, in some ways, is not dissimilar to many other industries. With many options and disparate services in a variety of locations inevitably comes consolidation and market concentration, which ultimately decreases competition for consumers. That's according to new findings from a report by the American Medical Association called Competition in Health Insurance, A Comprehensive Study of U.S. Markets.

Key findings, using data from the Decision Resources Group, show that based on the Department of Justice/Federal Trade Commission Horizontal Merger Guidelines, 75% of metropolitan statistical areas (MSA)-level commercial markets are highly concentrated (Herfindahl-Hirschman Indices (HHI)>2500). The average commercial market is also highly concentrated, with an HHI of 3504. Other findings are that in 91% of MSA-level markets, at least one insurer has a commercial market share of 30% or greater, and in 48% of markets, a single insurer's share is at least 50%.

The report also says that changes in commercial market concentration between 2014 and 2021 have been significant. Although there were some fluctuations in either direction in the intervening years, the share of commercial markets that are highly concentrated increased from 71% to 75%, and the average HHI rose by 181 points. Fifty-eight percent of markets experienced an increase in the HHI, and in 23% of markets the increase was at least 500 points. In markets with a rise in the HHI, the average increase was 540 points.