The analysis stated that consistently high levels of market concentration may be related to the consolidation of insurance companies through mergers and acquisitions.
AMA report We identified the insurers with the largest share of the market for commercial health insurance, Medicare Advantage plans, and public health exchanges that are part of the Affordable Care Act (ACA).
“High market concentration tends to reduce competition among health insurance companies and can harm patients by raising premiums above competitive levels,” said AMA President Jesse M. said Dr. Ehrenfeld, MPH. reflected in current federal guidelines. The AMA supports draft federal guidelines that lower the bar for regulation of what is considered a highly concentrated market. To reverse the trend of health insurance consolidation, the AMA strongly supports: [federal] The proposal is a good prescription to scrutinize and potentially limit harmful insurance mergers. ”
Top insurance companies by market size and type.
According to the AMA's findings, the top 10 companies in market share at the national level are 1. UnitedHealth Group (14%), 2. Elevance Health (12%), 3. CVS (Aetna) (11%), and 4. Cigna. (10%), 5. Kaiser Permanente (7%), 6. Health Care Services Corporation (6%), 7. Blue Cross Blue Shield of Michigan (2%), 8. Blue of Florida. – Cross Blue Shield (2%), 9. Blue Shield of California (2%), 10. Highmark (2%).
Additionally, UnitedHealth Group is the largest commercial health insurer in terms of market share in the national Medicare Advantage market with 42% of MSA, followed by Humana leading the market share with 22% of MSA, followed by CVS (Aetna). was found to be leading the market share. It leads the MSA with 7%.
In the ACA market, 90% of the MSA level market was highly concentrated in 2022, down from 95% in 2014. In 67% of MSAs, one health insurance company held at least 50% market share.
Areas with large population and high concentration
The report took a deep look at 381 metropolitan statistical areas (MSAs) across the country. Based on national standards, 73% of the MSA commercial market was found to be highly concentrated. In 48% of the markets, a single insurer had a share of at least 50%.
The numbers also show 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. While an increase of 2 points over 8 years is not dramatic, the bigger takeaway from the analysis is that the market is highly concentrated and appears to be well entrenched, and the numbers continue to rise.
The analysis stated that consistently high levels of market concentration may be related to the consolidation of insurance companies through mergers and acquisitions. “Mergers and acquisitions involving health insurance companies should raise serious antitrust concerns,” the report adds. “Conceptually, mergers and acquisitions can have beneficial or detrimental effects on consumers. However, only the latter has been observed. As a result of integration, the resulting benefits are passed on to consumers. Instead, they appear to have retained and exercised the monopoly power of health insurance companies, the ability to raise and maintain premiums above competitive levels.
not a new problem
Market consolidation is an ongoing issue across the healthcare industry, and analytical experts often warn of a lack of consolidation and competition among providers such as health systems and hospital groups.
But regardless of which large stakeholders are involved, questions remain about the impact on consumers when large companies dominate the market. The federal government is also looking into the issue. In recent months, the Biden administration has identified market consolidation as one area that will receive increased regulatory scrutiny.
A December press release from the Biden administration said, “Anticompetitive acquisitions and practices can dampen fair competition, lead to higher health care costs, worsen working conditions, and reduce innovation across the medical and pharmaceutical industries. ” he said. “Through regulation and legal action, the Federal Trade Commission, the Department of Justice, and the Department of Health and Human Services each work to promote competition to reduce health care costs for families and taxpayers and improve the quality and availability of health care for patients. We are working.”
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the insurance company will respond
America's Health Insurance Plans (AHIP), an industry group, disputed the report, saying competition among insurers has led to lower premium costs in some markets.in the comments to Med City NewsAHIP's senior vice president of communications said the industry is working to lower prices.
“Health insurance companies are the voices of the American people and are committed to providing Americans with lower prices and more choice,” Kristin Grow, senior vice president of communications for America's Health Insurance Plans, said in an email. “We are fighting,” he said. “We negotiate lower prices with doctors, hospitals and pharmaceutical companies, and as a result, consumers benefit from lower premiums.”
