How Big Five insurer mergers could affect market share in 4 states

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The "Big Five" health insurers could soon become the "Big Three" if the proposed Anthem-Cigna and Aetna-Humana mergers are granted regulatory approval. The merger mania among health insurers is evoking concern among many industry experts that consolidation could negatively affect hospitals, especially those in certain states.

According to Wells Fargo's Municipal Securities Research report released July 29, consolidation among insurers could lead to increased leverage for the soon-to-be Big Three, which could, in turn, pressure hospital pricing.

"It is difficult to assess the local impact of these proposed mergers on individual hospitals, but the already large scale of the Big Five is likely to make many submarkets, including the health insurance exchange markets, less competitive," authors of the report wrote.

Citing data from Kaiser Family Foundation's Commission on Medicaid & the Uninsured, the authors said hospitals in the following state insurance submarkets could experience the most notable effects on market share post-mergers. Some markets will have a new No. 1 in town, while others have insurers that area already so far ahead a merged entity still won't come close.

Individual insurance market

Large group insurance

Small group insurance market

Generally, insurer market share concentration is higher than that of hospitals in each state. Citing Kaiser, the report said the leading insurer in each state owned an average statewide market share of 57 percent in 2013. In several states, the dominant insurer held more than 90 percent of total statewide business, and the top three health insurer market leaders held more than 86 percent of statewide market shares.

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