Health insurance competition declines in half of U.S., study shows

Half of all states had less competitive health insurance markets, and Arkansas experienced the seventh largest decline in competition levels in 2017 from the previous year, according to a new study from the American Medical Association (AMA).

“The AMA continues to urge that competition, not consolidation, is the right prescription for health insurance markets,” said AMA President Barbara McAneny. “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. There is already too little competition among insurers, to the detriment of patients. Networks are already too narrow, and premiums are already too high.”

The 2018 edition of AMA’s Competition in Health Insurance: A Comprehensive Study of U.S. Markets shows most health insurance markets “are highly concentrated. Coupled with evidence on their anti-competitive behavior, this strongly suggests that health insurers are exercising market power in many parts of the country and, in turn, causing competitive harm to consumers and providers of care.” The study is designed to help policymakers and regulators identify markets where mergers might negatively impact patients and their physicians. It also helps to identify health insurance markets where antitrust enforcers should monitor how the markets are affected following a merger.

The study includes information on competition in health insurance markets for 50 states and the District of Columbia and 380 metropolitan statistical areas. It’s based on 2017 data from commercial enrollment in fully and self-insured health maintenance organizations, preferred provider organizations and point-of-service plans, consumer-driven health plans and public health exchanges.

North Dakota had the greatest decrease of any state in the competition level of health insurance markets in 2017, from the previous year. Alabama had the lowest level of competition in health insurance markets, followed by Hawaii and Louisiana. Anthem was the largest insurer in more metropolitan areas than any other insurer. It had the highest market share in 75 metro areas.

More information on the report is available here.