The concentration of commercial health insurance markets in the United States remains high, with 95% of metropolitan statistical areas (MSAs) classified as highly concentrated. This trend has persisted over the past decade, with concentration levels remaining between 95% and 96% from 2014 to 2023.
The lack of competition in the health insurance sector is concerning and could have significant implications for consumers. Nearly half of the markets that were already highly concentrated in 2014 have become even more concentrated by 2023. This consolidation raises concerns about the choices available to consumers, as selecting medical coverage can feel like having no choice at all.
The American Medical Association (AMA) is advocating for a dialogue among regulators, policymakers, and lawmakers to address this trend and foster a more competitive marketplace that benefits patients.
The study also reveals that a single payer holds a commercial market share of at least 30% in 89% of the markets analyzed, with 47% of regions seeing a single insurer controlling at least 50% of the market. Blue Cross Blue Shield (BCBS) plans dominate the landscape, holding the largest share in 83% of the MSAs included in the study.
BCBS insurers maintain the largest market share in 41 states, highlighting their significant influence in the health insurance sector. Elevance Health"s plans hold the largest market share in 21% of the metropolitan statistical areas. UnitedHealth Group is the largest payer nationally by market share, while Centene leads on the Affordable Care Act"s exchanges.
The concentration of market power among a few key players raises questions about the competitive dynamics of the health insurance industry and its potential impact on pricing and service quality for consumers.
The analysis also extends to Medicare Advantage (MA) markets, which are similarly characterized by high concentration levels. In 2023, 97% of MSA-level Medicare Advantage markets were classified as highly concentrated. UnitedHealth Group stands out in this segment, controlling the largest market share nationally at 29%. The insurer holds the largest share in 43% of MSA-level markets, solidifying its dominant position in the health insurance landscape.
The concentration of market power in both commercial and Medicare Advantage sectors raises critical questions about the future of healthcare access and affordability for American consumers.
The persistent concentration in health insurance markets poses challenges for consumers, who may face limited options and higher costs due to reduced competition. The AMA"s call for a renewed dialogue among stakeholders is crucial in addressing these issues and exploring potential regulatory measures to promote competition. Policymakers must consider the implications of market consolidation on healthcare access and affordability.
The findings from the AMA study serve as a reminder of the importance of fostering a competitive environment that prioritizes the needs of patients and ensures access to a range of affordable healthcare options. Ongoing discussions among regulators, lawmakers, and industry leaders will be pivotal in shaping the future of health insurance in the United States.