{"id":822510,"date":"2025-01-28T02:12:24","date_gmt":"2025-01-28T08:12:24","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/01\/28\/competition-remains-elusive-in-private-insurance-market\/"},"modified":"2025-01-28T02:12:24","modified_gmt":"2025-01-28T08:12:24","slug":"competition-remains-elusive-in-private-insurance-market","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/01\/28\/competition-remains-elusive-in-private-insurance-market\/","title":{"rendered":"Competition Remains Elusive in Private Insurance Market"},"content":{"rendered":"<p>Business <\/p>\n<div check-ads-type=\"true\">\n<p>Competition among US private insurance companies has generally declined since 2011 in large-group, small-group, and individual markets, a government report found. However, the trend has slowed or even reversed in some states over the past few years.<\/p>\n<p>Meanwhile, an American Medical Association (AMA) analysis warns that \u201cthe vast majority of health insurance markets remain stubbornly highly concentrated and at risk for insurer mergers to substantially lessen competition.\u201d<\/p>\n<p>The findings, released in a pair of recent reports, paint a picture of an insurance market that\u2019s dominated in many states and regions by three or fewer competitors. But there hasn\u2019t been a rush toward concentration like the one that\u2019s been seen among hospitals and physicians over the past few years, University of New Hampshire, Durham, New Hampshire, professor of health economics Bradley Herring, PhD, told <em>Medscape Medical News.\u00a0<\/em>\u201cThere are increases, but they&#8217;re not really dramatic,\u201d he said. \u201cWe&#8217;re not seeing big mergers in the health insurance sector.\u201d<\/p>\n<h2>Business <strong>Government Accountability Office (GAO): Individual Market Is Especially Noncompetitive<\/strong><\/h2>\n<p>The government report was conducted by the <a href=\"https:\/\/www.gao.gov\/assets\/gao-25-107194.pdf\">GAO<\/a>. It examines the state of the private health insurance market, which covers two thirds of the US population, from 2011 to 2022.<\/p>\n<p>Here are some findings from the report:<\/p>\n<ul>\n<li>In 2019, at least 80% of private insurance enrollment was limited to the largest three (or fewer) insurers in 47 states, up from 33 in 2011. But that number dipped to 35 in 2022. (The report considers Washington, DC, to be a state.)<\/li>\n<li>Two states had fewer than three insurers in the small-group market (Vermont and Wyoming with two each), and 28 had fewer than three insurers in the individual market.<\/li>\n<li>In the individual market in 2020, three or fewer insurers accounted for 80% or more of enrollment in every single state, up from 47 in 2015. However, the number of states in this category dipped back down to 47 in 2022.<\/li>\n<li>Meanwhile, the number of states with at least 80% of the individual market concentrated in a single insurer rose from 4 to 12 from 2011 through 2019 but fell to 7 by 2022.<\/li>\n<li>Concentration has been on the rise in the small-group market: In 2022, at least 80% of the market was concentrated in a single insurer in 15 states, up from 3 in 2011.<\/li>\n<li>In 2022, only five states \u2014 New York, Wisconsin, Connecticut, Massachusetts, and Georgia \u2014 had more than three insurers account for 80% or more of the small-group market.<\/li>\n<li>There was a similar trend in the large-group market. In 2022, at least 80% of the market was concentrated in a single insurer in 15 states, up from 6 in 2011.<\/li>\n<\/ul>\n<p>The data don\u2019t offer insight into the reasons behind the trends, said John Dicken, director of Health Care \u2014 Public Health and Private Markets at the GAO, in an interview. However, \u201cconcentration could occur when insurers leave markets, there are mergers and acquisitions among insurers, or if larger insurers gain market share from smaller insurers.\u201d<\/p>\n<h2>Business <strong>AMA: Private Insurance Is \u2018Highly Concentrated\u2019 Across Metros<\/strong><\/h2>\n<p>The AMA report examines data about the concentration of private insurers in states and metro areas in 2023. \u201cCommercial markets in metropolitan statistical areas have remained stubbornly highly concentrated over the last decade,\u201d said Bruce A. Scott, MD, AMA president and an otolaryngologist based in Louisville, Kentucky, in an interview.<\/p>\n<p>Here are some findings from the report:<\/p>\n<ul>\n<li>Health insurers were \u201chighly concentrated\u201d in 95% of metro areas, unchanged from 2014. The study defines markets as being highly concentrated when they meet criteria developed by the US government. \u201cThe share of commercial markets that are highly concentrated and hovered between 95% and 96% in that 10-year period [from 2014 to 2023],\u201d Scott said in an interview.<\/li>\n<li>In 47% of metro areas, a single insurer dominated at least 50% of the market; single insurers had at least a 30% share in 47%.<\/li>\n<li>The least competitive health insurance markets were Alaska, Hawaii, Louisiana, Alabama, Delaware, Kentucky, Illinois, Michigan, South Carolina, and Vermont. In Alabama, one insurer had 86% of the market; the next highest numbers were 67% in Michigan and Kentucky.<\/li>\n<li>In terms of the insurance exchanges, the least competitive health insurance markets were Alaska, Louisiana, Alabama, Mississippi, Delaware, Iowa, Utah, Wyoming, Rhode Island, and Washington, DC.<\/li>\n<li>Medicare Advantage markets were \u201chighly concentrated in 97% of metro areas, down from 99% in 2017.\u201d In Wyoming, a single insurer accounted for 79% of the Medicare Advantage market, the highest number of any state, vs 24% in New York, the lowest number.<\/li>\n<\/ul>\n<h2>Business <strong>Concentration Seems Bad for Docs, but Maybe Not Patients<\/strong><\/h2>\n<p>What does less insurer competition mean for clinicians? \u201cHigh market concentration tends to lower competition and facilitate the exercise of market power,\u201d AMA\u2019s Scott said. \u201cWhen insurers exercise market power, health plan premiums would be higher, and payments to providers and the quantity of healthcare would be lower, in comparison to competitive health insurance markets.\u201d<\/p>\n<p>However, the University of New Hampshire\u2019s Herring said this isn\u2019t the only scenario when insurer competition dwindles. He\u2019s conducted research that suggests insurers don\u2019t have a lot of room to jack up premiums even if competition disappears. \u201cThey still want to sell health insurance policies, right? There&#8217;s some kind of limit in terms of passing on a really, really high health insurance premium,\u201d he said. And government regulations limit how much insurers can spike premiums.<\/p>\n<p>But insurers can still goose profits by negotiating to pay lower prices to providers and hospitals, he said. \u201cThey&#8217;re the ones that really stand to lose.\u201d<\/p>\n<p>What about the insurer argument that consolidation leads to less administrative overhead? \u201cI haven&#8217;t really seen data that suggest larger insurers are more efficient,\u201d Herring said.<\/p>\n<p>What happens now? It\u2019s not clear whether the new Trump administration will continue the Federal Trade Commission\u2019s crackdown on health insurer mergers, said Alison Evans Cuellar, PhD, MBA, of George Mason University College of Public Health in Fairfax, Virginia., in an interview. \u201cThe FTC has had recent, notable successes,\u201d she said.<\/p>\n<p>Meanwhile, \u201cstate attorneys general have an important role to play as well,\u201d she said, \u201calthough if enforcement is uneven across states, then we get greater disparities in our healthcare system.\u201d<\/p>\n<p><em>Herring had no disclosures.<\/em> <em>Cuellar disclosed funding from NIH and the Robert Wood Johnson Foundation.<\/em><\/p>\n<p><em>Randy Dotinga is an independent writer and board member of the Association of Health Care Journalists.<\/em><\/p>\n<\/div>\n<p><a href=\"https:\/\/www.medscape.com\/viewarticle\/competition-remains-elusive-private-insurance-market-2025a10001tn\" class=\"button purchase\" rel=\"nofollow noopener\" target=\"_blank\">Read More<\/a><br \/>\n Sharie Kazmierczak<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Competition among US private insurance companies has generally declined since 2011 in large-group, small-group, and individual markets, a government report found. However, the trend has slowed or even reversed in some states over the past few years. Meanwhile, an American Medical Association (AMA) analysis warns that \u201cthe vast majority of health insurance markets remain stubbornly<\/p>\n","protected":false},"author":1,"featured_media":822511,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27306,35067,22564],"tags":[],"class_list":{"0":"post-822510","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-competition","8":"category-heath","9":"category-remains"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/822510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=822510"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/822510\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/822511"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=822510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=822510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=822510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}