The analysis said the consistently high levels of market concentration can be linked to consolidation of insurers through mergers and acquisition.
The AMA report identified insurers with the largest shares of market of commercial health insurance, Medicare Advantage plans, and public health exchanges that are part of the affordable Care Act (ACA).
“High market concentration tends to lower competition among health insurers, which can harm patients by raising insurance premiums above competitive levels,” said AMA President Jesse M. Ehrenfeld, M.D., M.P.H. “The share of markets that are highly concentrated may be far higher than reflected under current federal guidelines. The AMA supports draft federal guidelines that would lower the regulatory threshold for markets to be considered highly concentrated. To reverse the trend toward health insurance consolidation, the AMA strongly supports the [federal] proposal as the proper prescription to scrutinize and potentially limit harmful insurance mergers.”
Top insurers by market size and type.
The AMA findings said at the national level, the 10 largest commercial health insurers by market share were: 1. UnitedHealth Group (14%), 2. Elevance Health (12%), 3. CVS (Aetna) (11%), 4. Cigna (10%), 5. Kaiser Permanente (7%), 6. Health Care Service Corp. (6%), 7. Blue Cross Blue Shield of Michigan (2%), 8. Blue Cross Blue Shield of Florida (2%), 9. Blue Shield of California (2%), and 10. Highmark (2%).
It further found that UnitedHealth Group was the largest commercial health insurer by market share in the Medicare Advantage market nationally, at 42% of MSAs, followed by Humana with a market share lead in 22% of MSAs, and CVS (Aetna) with a market share lead in 7% of MSAs.
For ACA markets, 90% of MSA-level markets were highly concentrated in 2022, down from 95% in 2014. In 67% of MSAs, one health insurer held a market share of at least 50%.
In areas of high population, high levels of concentration
The report looked closely at 381 metropolitan statistical areas (MSAs) across the country. It found that 73% of MSA commercial markets were highly concentrated, based on national standards. In 48% of markets, a single insurer’s share was at least 50%.
The numbers also showed that market concentration is not a new phenomenon. Between 2014 and 2022, the share of highly concentrated commercial markets rose from 71% to 73% nationwide. Although a two-point increase over eight years is not dramatic, the larger point in the analysis is that the market concentration is high and seems solidly entrenched, with numbers continuing to move up.
The analysis said the consistently high levels of market concentration can be linked to consolidation of insurers through mergers and acquisition. “Mergers and acquisitions involving health insurers should raise serious antitrust concerns,” the report adds. “Conceptually, mergers and acquisitions can have beneficial and/or harmful effects on consumers. However, only the latter has been observed. It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power—the ability to raise and maintain premiums above competitive levels — instead of the passing of any benefits obtained through to consumers.”
Not a new problem
Market consolidation is an ongoing issue throughout the health care industry, with analysists often issuing warnings about consolidation and lack of competition between providers such as health systems and hospital groups.
But regardless of which large stakeholder is involved, there continues to be questions about the effect on consumers when large companies dominate markets. The federal government is also taking a closer look at the issue; in recent months, the Biden Administration identified market consolidation as one area it will be subjecting to tighter regulatory scrutiny.
“Anticompetitive acquisitions and practices can chill fair competition, leading to higher health care costs, degraded working conditions, and less innovation across the health care and pharmaceutical industries,” a Biden Administration press release said in December. “Through regulatory and legal actions, the Federal Trade Commission, Department of Justice and Department of Health and Human Services are each working to promote competition to lower health care costs for families and taxpayers and improve the quality and availability of health care for patients.”
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Insurers answer back
The industry group America’s Health Insurance Plans (AHIP) disputed the report by saying that competition among insurers has led to drops in premiums costs in some markets. In a comment to MedCity News, AHIP senior vice president of communication said the industry was working to lower prices.
“Health insurance providers are an advocate for Americans, fighting for lower prices and more choices for them,” said Kristine Grow, senior vice president of communications at America’s Health Insurance Plans, in an email. “We negotiate lower prices with doctors, hospitals and drug companies, and consumers benefit from lower premiums as a result.”
Read More:High concentration of health care insurance markets continues
2023-12-24 17:15:26
