Competition drops in health insurance markets; Anthem dominates

Commercial health insurance markets in 25 states became more concentrated from 2016-17, according to a study from the American Medical Association. 

The study's findings and what the association dubs "anticompetitive behavior" among payers indicate health insurers are "causing competitive harm to consumers and providers of care," in many markets, according to the AMA.

"The AMA continues to urge that competition, not consolidation, is the right prescription for health insurance markets," AMA President Barbara L. McAneny, MD, said in a press release. "The slide toward insurance monopolies has created a market imbalance that disadvantages patients and favors powerful health insurers. The prospect of future mergers involving health insurance companies should raise serious antitrust concerns."

Here are six key findings from the study:

  1. Anthem dominated more metropolitan areas than any other insurer. In 2017, it held the highest market share in 75 metropolitan statistical areas.
  2. Anthem's share was followed by Health Care Service Corp., which held the most market share in 40 metro areas, and UnitedHealth Group, with the most share in 27 metro areas.
  3. The majority of insurance markets are highly concentrated. When HMO, PPO, point-of-service plans and public exchanges are taken together, 73 percent of markets are considered highly concentrated on the Herfindahl Index, a measure of market competition.
  4. Broken down by type of insurance, point-of-service plans are the least competitive — 100 percent of POS markets are considered highly concentrated. HMO markets and exchange markets follow closely behind, with 96 percent of markets for both types of insurance considered highly concentrated.
  5. PPO markets were the most competitive, but most (88 percent) are still highly concentrated.
  6. North Dakota, Alaska, Louisiana, Indiana and Utah lost the most competition between 2016 and 2017.

Read more here.

 

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