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Health insurance companies lock up market share across the nation


AMA examines how dominating metro areas has effects on patients and physicians.

health insurance concept: © wladimir1804 - stock.adobe.com

© wladimir1804 - stock.adobe.com

Health insurance companies are tightening their holds on local markets, creating conditions bad for patients and physicians, according to the American Medical Association (AMA).

The association published its 2023 edition of “Competition in Health Insurance: A Comprehensive Study of U.S. Markets,” examining insurers’ market shares in 381 metropolitan statistical areas (MSAs), the 50 states and Washington, D.C.

The result: “Most health insurance markets are ripe for the exercise of health insurer market power, which harms consumers and providers of care,” the report said. “Our findings should prompt federal and state antitrust authorities to vigorously examine the competitive effects of proposed mergers involving health insurers.”

As health insurance companies gain more market share, they have power to charge more to patients and pay less to physicians. Questions of competition are important because insurance companies that dominate a market have higher premiums and offer less coverage than they would in competitive markets, according to AMA.

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

“The AMA supports draft federal guidelines that would lower the regulatory threshold for markets to be considered highly concentrated,” he said. “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.”

Ehrenfeld referred to draft merger guidelines published in July by the Federal Trade Commission, which is seeking public comment on them. There are 13, starting with: “Mergers should not significantly increase concentration in highly concentrated markets,” with concentration referring to the number and relative size of rivals competing to offer a product or service to a pool of customers.

AMA examined three types of health insurance: commercial, Medicare Advantage (MA), and public health exchange markets.

Commercial insurance

As of 2022, highly concentrated markets increased to 73%, up from 71% in 2014, for the MSAs. If the new federal guidelines were enacted, that figure would reach 95%. One health insurer had at least 50% market share in 184 MSAs, or 48% of the total.

Elevance Health, formerly Anthem, was the largest health insurer by market share in 83 MSAs, or 22% of the total. Health Care Service Corp. led market share in 43 MSAs (11%), while Highmark was the market share leader in 22 MSAs (6%).

Medicare Advantage

High concentration in MA decreased from 2017 (87%) to 2022 (71%). However, under the proposed federal guidelines, 97% of MSAs would be considered highly concentrated.

In 118 MSAs (31%), one health insurer held a market share of at least 50%. UnitedHealth Group had the largest market share in 161 MSAs, or 42% of them, with Humana in second place with largest market share in 83 MSAs (22%), and CVS (Aetna) leading market share in 25 MSAs (7%).

Public health exchange markets

For ACA Marketplace health insurance, 339 MSA markets, or 90%, were highly concentrated in 2022. That was down from 307 (95%) in 2014, but under the proposed federal guidelines, 373, or 99%, of MSAs would be considered highly concentrated.

There were 254 MSAs, or 67%, with one health insurer holding at least 50% of the market share. Centene Corp. was the largest health insurer in 56 MSAs (15%). Elevance health was the market share leader in 23 MSAs (6%), while Blue Cross Blue Shield of Florida and Health Care Service Corp. each led market share in 21 MSAs (6%).

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