In general economics, it is understood that any highly-concentrated industry, will likely produce less competition, reduce consumers’ choice while increasing the price for goods and services. It was for these reasons that the U.S. Government Accountability Office (GAO)researched the topic of healthcare insurance companies with the largest market share in each U.S. state.
Specifically, the GAO study is based on the principle that a highly concentrated health insurance market could indicate less competition. This in turn would directly impact businesses and individuals’ choices of healthcare plans as well as the costs of premiums and deductibles. In data from 2011 through 2016, the GOA reports that overall enrollment in private health insurance plans continued to become concentrated among a small number of insurance companies.
Competition in the U.S. Healthcare Insurance Industry:
By 2017, according to Forbes, the top two insurers control more than 50 percent of the healthcare insurance market in most of the United States. In these areas with limited insurers, insurance premiums are higher. However, researchers found that adding one more insurer to an ACA marketplace reduces premiums for everyone in that market by an average of 4.5 percent.
The American Medical Association (AMA) also advocate for a healthcare system that promotes more competition between insurance providers while simultaneously offering more choice for patients. The AMA believes that patients and doctors are better served in a healthcare system that promotes competition and choice.
They argue that there are usually negative consequences on the larger U.S. healthcare system when large health insurers pursuing merger strategies. These mergers allow them to acquire dominant positions in local healthcare insurance markets. The AMA states that mergers threaten to increase health insurer concentration, reduce competition and decrease consumers’ choice of insurance plans.
For medical practices and health systems, the major health insurance providers have a substantial impact on reimbursement policies as well as in-network versus out-of-network status.
Research by the AMA shows that there has already been a serious decline in competition among health insurers with nearly 3 out of 4 metropolitan areas rated as ‘highly concentrated’ according to federal guidelines used to assess market competition. Roughly, 41 percent of U.S. metropolitan areas have a single healthcare insurer with an individual commercial market share of 50 percent or more. Other studies by the AMA show that half of all states had commercial health insurance markets that were less competitive in 2017 than during the previous year.
Largest and Smallest Market Share:
A recent article from Becker’s Hospital Review points out that there are at least 37 of 50 states plus the District of Columbia, the three biggest health insurers held 80 percent of the individual exchange market from 2015 to 2017. The article actually list the health insurer with largest individual market share in all 50 U.S. states.
Yet, the term “largest portion” is somewhat vague. For a frame of reference, here are the states with the largest and smallest individual market share controlled by one healthcare insurance provider.
The largest individual Market shares are in Alabama (Blue Cross and Blue Shield of Alabama – 100 percent), Alaska (Premera Blue Cross – 100 percent), Oklahoma (Health Care Service Corp. – 100 percent), South Carolina (BlueCross and BlueShield of South Carolina – 100 percent) and Wyoming (Blue Cross Blue Shield of Wyoming – 100 percent).
Inversely, the states with the lowest percentages are Washington (Molina Healthcare – 23.4 percent), Minnesota (HealthPartners – 26 percent), Texas (Health Care Service Corp. – 27.8 percent) and California (Kaiser Foundation – 28.3 percent)
Insurance Concentration for Ohio & neighboring States:
In the state of Ohio as well as in the surrounding states, there are a few insurance companies that provide the largest portion of healthcare coverage. However, Ohio and many of the neighboring states are less concentrated than the national average.
Ohio (CareSource – 31.7 percent)
Indiana (Centene Corp. – 35.6 percent)
Pennsylvania (Independence Blue Cross – 39.4 percent)
Kentucky (WellPoint – 59.8 percent)
Michigan (Blue Cross Blue Shield of Michigan – 49.5 percent)
West Virginia (Highmark – 79.4 percent)
About Us:
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