In many areas of the country, only one or two health insurers dominate the market, leaving physicians and patients with few choices when it comes to dealing with health plans, according to a new analysis from the American Medical Association.
In 41% of metropolitan areas examined in the AMA’s study, a single health insurer holds half or more of the market share. And the AMA found that 72% of the markets they analyzed would be considered “highly concentrated” under guidelines developed by the U.S. Department of Justice and the Federal Trade Commission to assess market competition.
Dr. Robert M. Wah
Wellpoint Inc. stood out among insurers as the most dominant across the country. As of Jan. 1, 2012, Wellpoint had the greatest market share in 82 of 388 metropolitan areas analyzed by the AMA, giving it the top market share in more than double the number of areas as the next two insurers (Health Care Service Corp. and UnitedHealth Group).
The lack of competition puts physicians and patients at risk, the AMA said, because it gives health plans the power to raise premiums without increasing benefits, while also cutting payments to providers. The AMA is calling on state and federal regulators to take the lack of competition into account when considering future insurance mergers.
“The dominant market power of big health insurers increases the risk of anticompetitive behavior that harms patients and physicians and presents a significant barrier to the market success of smaller insurance rivals,” Dr. Robert M. Wah, AMA president, said in a statement.
The 10 states with the least competition in their commercial health insurance markets were: Alabama, Hawaii, Michigan, Delaware, Louisiana, South Carolina, Alaska, Illinois, Nebraska, and North Dakota.
mschneider@frontlinemedcom.com
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