Many U.S. Cities Lack Health Insurance Competition
MONDAY, Oct. 23, 2017 -- A single company dominates the health insurance market in many U.S. cities -- and that dangerous trend is increasing, according to a new American Medical Association (AMA) report.
Analyzing 2016 data, researchers found that in 43 percent of 389 cities, just one health insurer had at least a 50 percent share of the market. That compares with 40 percent of cities in 2014.
Moreover, 69 percent of health insurance markets in those 389 cities were "highly concentrated" in 2016, meaning there was a significant lack of competition.
Anthem commanded the market in 82 of the cities examined, followed by Health Care Service Corp. (42 cities) and UnitedHealth Group (26 cities).
Highly concentrated health insurance markets lead to higher patient premiums, according to the AMA.
The report aims to draw the attention of policymakers and regulators to specific markets where lack of competition may harm patients and the doctors treating them.
"After years of largely unchallenged consolidation in the health insurance industry, a few recent attempts to consolidate have received closer scrutiny than in the past, including the proposed mergers of Anthem and Cigna, as well as Aetna and Humana," said AMA President Dr. David Barbe.
"Previous versions of the AMA study played a key role in efforts to block the proposed mega-mergers by helping federal and state antitrust regulators identify markets where those mergers would cause anti-competitive harm," Barbe noted in an AMA news release.
In the current report, the 10 states with the least competitive commercial health insurance markets are: Alabama, Delaware, Hawaii, South Carolina, Louisiana, Michigan, Kentucky, Vermont, Alaska and Illinois.
In 27 states, the commercial health insurance market became more concentrated between 2014 and 2016. The 10 states with the largest increases in market concentration during that time were: Kentucky, Alaska, South Carolina, Mississippi, South Dakota, Oklahoma, Vermont, Arkansas, Nevada and New Mexico.
The American Academy of Family Physicians has more on health insurance.
Posted: October 2017