The culmination of years of consolidation among health insurers is restricting competition in four out of five metropolitan areas in the United States, new analysis from the American Medical Association finds.
The 2011 edition of "Competition in Health Insurance: A Comprehensive Study of U.S. Markets," analyzes commercial health insurance market shares and federal concentration measures for 368 metropolitan markets and 48 states. The study finds a significant absence of health insurer competition exists in 83% of metropolitan markets studied by the AMA. Indeed, in about half of metropolitan markets, at least one health insurer had a commercial market share of 50% or more, and in 24 of the 48 states in study, the two largest health insurers had a combined commercial market share of 70% or more. In order, the 10 states with the least competitive commercial health insurance markets are: Alabama, Alaska, Delaware, Michigan, Hawaii, District of Columbia, Nebraska, North Carolina, Indiana and Maine.
“New data presented by the AMA demonstrates the degree of anti-competitive market clout that some health insurers have gained through mergers and acquisitions,” says AMA President Peter W. Carmel, M.D. “Our new report is intended to help regulators, lawmakers, researchers and policymakers identify markets where mergers among health insurers may cause competitive harm to patients, physicians and employers.”
For insurers, the numbers raise anti-trust implications. The study notes that the 83% of markets rated “highly concentrated,” were done so based on the newly revised "Horizontal Merger Guidelines" issued last year by the U.S. Department of Justice and Federal Trade Commission. “High concentration levels in health insurance markets are largely the result of consolidation, which can lead to the exercise of market power and, in turn, harm to consumers and providers of care,” the report states. “Past and future consolidation of health insurers should raise serious antitrust concerns.”
Bill Kenealy writes for Insurance Networking News, a SourceMedia publication.
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