Michigan’s health insurance market ranks as the 2nd least competitive in the nation

Michigan remains the least competitive state in the nation in 2022 for employee health insurance, although the trade association representing Blue Cross Blue Shield of Michigan’s competitors says research shows they gained small gains over the past few years.

The annual report from the American Medical Association again ranked Michigan as the second least competitive state because Blue Cross Blue Shield held two-thirds of the statewide market share in all types of health plans. Grand Rapids-based Priority Health came in second with a 12% statewide market share.

The only state less competitive than Michigan in 2022 is Alabama, where Blue Cross Blue Shield plans have an 86% market share, according to the AMA.

Blue Cross Blue Shield of Michigan has long been the dominant health plan in the state. Although the AMA cited the large market share previously held by Detroit-based Blue Cross Blue Shield as making Michigan an uncompetitive market, a spokeswoman said the annual report data only reflects customer choice. and that the state has competition for employee health coverage.

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The AMA’s conclusions don’t match the fact that, here in Michigan, employers and consumers in every area of ​​health insurance have a choice of carriers, said Andy Hetzel, Blue Cross Blue Shields vice president of corporate communications. The fact that Blue Cross remains the preferred health insurance brand for most employers and consumers in Michigan should not be mistaken as the result of an uncompetitive market, when it more accurately reflects a company that maintains his industry-leading value proposition in a field of strength. competitors.

Blue Cross Blue Shields 67% statewide market share in 2022, which is a one percent reduction from last year, comes in HMO, PPO, point-of-service health plans and individual policies sold on public health exchanges. The Blues led all metropolitan areas in the state’s statistics by a wide margin, though rival Priority Health made small gains from 2021 to 2022 in West Michigan, according to the AMA report.

Grand Rapids, where Blue Cross Blue Shield in 2022 held a 53% market share to Priority Healths 32%, is the most competitive market in the state. Priority Health gained two percentage points in market share from 2021 to 2022 in the Grand Rapids area, while Blue Cross Blue Shield declined by the same rate.

The next closest market for competition is Muskegon, led by Blue Cross Blue Shield with a market share of 62% to Priority Healths 26%. That compares to 63% for Blue Cross and 24% for Priority Health last year.

Blue Cross Blue Shield is more dominant for PPO health plans, holding 78% of the statewide market share to 8% for Aetna, which is owned by CVS Health Corp. Blue Cross Blue Shield led the PPO market share by similarly large margins in statewide markets. These include:

  • 73% in Priority Healths 10% in the Grand Rapids area,
  • 86% to Cignas 5% in the Kalamazoo area,
  • 77% in Priority Healths 9% in Muskegon,
  • 80% in Aetnas 8% in Niles-Benton Harbor MSA, and
  • 86% in Priority Healths 4% in Battle Creek.

The AMA annually analyzes data and issues a report identifying the top two market-share leaders in 381 metropolitan statistical areas nationwide.

While the annual report for 2023 shows Blue Cross Blue Shields’ continued grip on the statewide market, the Michigan Association of Health Plans cited its own data showing incremental member earnings.

Combined MAHP members held a 26.5% market share in 2022 for small and large group, individual and self-insured health policies covering more than 5.5 million people, compared to a collective 21.75% in 2020.

Blue Cross Blue Shields’ market share of both health plan types fell from 75.4% in 2020 to 70.94% in 2022, according to MAHP data.

2022 only is the most significant increase in the combined market share of our members and total life insured, as MAHP members increase by three and a half percentage points from 2021, wrote Brian Mills, the association’s deputy director of commercial markets and communications, in an email to Crains Grand Rapids Business.

Our members are making steady inroads into the commercial market, said Mills. MAHP members’ market share has grown in the commercial market, and members are proud of their diverse offerings and their increased market share.

Passage of state legislation in the fall of 2022 requiring Insurance carriers to provide medical claims data to employers to use to bid out employee health coverage could help to drive more gains, Mills said. Next year is the first full year that our members will be able to use this tool to encourage more employers to shop, he said.

Nationally, the AMA concluded that nearly three-quarters of markets across the US are highly concentrated.

Most health insurance markets are ripe for the exercise of market power by health insurers, harming consumers and care providers, the authors of the AMA’s annual report wrote.

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