The high concentration of health care insurance markets continues | BenefitsPRO

The concentration of insurance markets is the subject of a detailed new report from the American Medical Association (AMA), which finds that limited competition between insurers can harm consumers and providers.

The AMA report identified the insurers with the largest market share 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 reduce competition among health insurers, which can harm patients by raising insurance premiums above competitive levels, said AMA President Jesse M. Ehrenfeld. , MD, MPH The share of highly concentrated markets may be higher than would be found under current federal guidelines. The AMA supports draft federal guidelines that would lower the regulatory threshold for markets that would be considered highly concentrated. To reverse the trend toward health insurance consolidation, the AMA strongly supports the [federal] proposal as a valid prescription to examine 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 are: 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 is the largest commercial health insurer by market share in the Medicare Advantage market nationwide, at 42% of MSAs, followed by Humana with a market share lead at 22% of MSAs, and CVS (Aetna) with a market. share lead in 7% of MSAs.

For ACA markets, 90% of MSA-level markets will be highly concentrated by 2022, down from 95% in 2014. In 67% of MSAs, one health insurer holds a market share of at least 50%.

In highly populated areas, concentration levels are high

The report looked closely at 381 metropolitan statistical areas (MSA) across the country. It found that 73% of MSA commercial markets are highly concentrated, based on national standards. In 48% of markets, a share of insurers is at least 50%.

The figures also showed that market concentration is not a new phenomenon. Between 2014 and 2022, the share of the highly concentrated commercial market increased from 71% to 73% nationwide. While an increase of two points in eight years is not remarkable, the larger point in the analysis is that market concentration is high and seems firmly entrenched, with the numbers continuing to rise.

The analysis said the continued high level of market concentration can be attributed to the consolidation of insurers through mergers and acquisitions. Mergers and acquisitions involving health insurers should raise serious antitrust concerns, the report added. Conceptually, mergers and acquisitions can have beneficial and/or harmful effects on consumers. However, only the latter was observed. Consolidation appears to have resulted in health insurers gaining and exercising monopoly power the ability to raise and maintain premiums above competitive levels rather than passing on any benefits gained to consumers.

Not a new problem

Market consolidation is an ongoing issue throughout the health care industry, with reviews often issuing warnings about consolidation and lack of competition between providers such as health systems and hospital group.

But regardless of which large stakeholder is involved, there continue to be questions about the impact on consumers when large companies dominate markets. The federal government is also looking into the issue; in recent months, the Biden Administration has identified market consolidation as an area that will come under stricter regulatory scrutiny.

Anticompetitive acquisitions and practices can stifle fair competition, leading to higher health care costs, poor working conditions, and less innovation throughout the health care and pharmaceutical industries, the Biden Administration said in a statement on December. Through regulations and legal actions, the Federal Trade Commission, the Department of Justice and the Department of Health and Human Services are each working to promote competition to lower health care costs for families and payers. taxes and improve the quality and availability of health care for patients.

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Insurers respond

Industry group Americas Health Insurance Plans (AHIP) disputed the report, saying competition among insurers has led to lower premium costs in some markets. In a comment to MedCity News, the AHIP senior vice president of communication said the industry is working hard to lower prices.

Health insurance providers are an advocate for Americans, fighting for lower prices and more options for them, said Kristine Grow, senior vice president of communications at Americas 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.

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