High concentration of health care insurance markets continues. profitpro

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

The AMA report identified the insurers with the largest market shares of commercial health insurance, Medicare Advantage plans and the public health exchanges that are part of the Affordable Care Act (ACA).

Higher market concentration reduces 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 much higher than current federal guidelines. The AMA supports draft federal guidelines that would lower the regulatory threshold for markets considered highly concentrated. To reverse the trend of health insurance consolidation, the AMA strongly supports [federal] Proposed as appropriate prescriptions to investigate harmful insurance mergers and potentially limit them.

Top insurers by market size and type.

The AMA’s findings stated that nationally, the 10 largest commercial health insurers by market share were: 1. UnitedHealth Group (14%), 2. Alleviance Health (12%), 3. CVS (Aetna) ( 11%), 4. Cigna (10%), 5. Kaiser Permanente (7%), 6. Health Care Services Corp. (6%), 7. Blue Cross Blue Shield of Michigan (2%), 8. Blue Cross of Florida Blue Shield (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 nationally in the Medicare Advantage market with 42% of MSAs, followed by Humana with 22% of MSAs, and CVS (Aetna) was in second place with a market share. 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, a single health insurer had a market share of at least 50%.

In high population areas, high levels of density

The report took a close look at 381 metropolitan statistical areas (MSAs) across the country. It found that 73% of MSA commercial markets were highly concentrated by national standards. In 48% of markets, a single insurer had a share of at least 50%.

The data also revealed that market concentration is not a new phenomenon. Between 2014 and 2022, the share of highly concentrated commercial markets nationwide is expected to increase from 71% to 73%. While double-digit growth over eight years isn’t dramatic, the big takeaway from the analysis is that market concentration is high and appears to be solidly strong, with the numbers continuing to grow.

The analysis said the persistently high levels of market concentration could be linked to consolidation of insurers through mergers and acquisitions. The report said mergers and acquisitions involving health insurance companies should raise serious antitrust concerns. Conceptually, mergers and acquisitions can have beneficial and/or harmful effects on consumers. However, only the latter has been observed. The consolidation appears to have resulted in the capture and exercise of the health insurer’s monopoly power over the ability to raise and maintain premiums above competitive levels rather than passing on to consumers any benefits received.

no new problems

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

But no matter which major stakeholders are involved, questions remain about the impact on consumers when large companies dominate the market. The federal government is also closely monitoring the issue; In recent months, the Biden administration has identified market consolidation as an area that will be subject to tighter regulatory scrutiny.

A press release from the Biden administration in December said that anti-competitive acquisitions and practices could chill fair competition, lead to higher health care costs, worsen working conditions and disrupt the health care and pharmaceutical industries. There may be less innovation. Through regulatory and legislative actions, the Federal Trade Commission, the Department of Justice, and the Department of Health and Human Services each promote competition to reduce health care costs for families and taxpayers and improve the quality and availability of health care for patients. Working to give.

Related: Cracking the code: The vital role of HR in making M&A deals successful

Insurers respond

Industry group America’s Health Insurance Plans (AHIP) refuted the report, saying competition among insurers had led to premium costs falling in some markets. In a comment to MedCity News, AHIP’s senior vice president of communications said the industry is working to lower prices.

Christine Grow, senior vice president of communications at America’s Health Insurance Plans, said in an email that health insurance providers are advocates for Americans, fighting for lower prices and more choices for them. We negotiate lower prices with doctors, hospitals and pharmaceutical companies and consumers benefit from lower premiums as a result.

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