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Thursday, November 29, 2012
Health Insurance: Hawaii 2nd Most Monopolized
By News Release @ 9:00 PM :: 8173 Views :: Energy, Environment, National News, Ethics

New AMA Study Finds Anticompetitive Market Conditions are Common across Managed Care Plans

News Release from American Medical Association November 28, 2012

Chicago -- The American Medical Association (AMA) today released a new study showing that anticompetitive market power is widespread for each of the three most popular managed care plans in the U.S. The AMA's annual health insurance market analysis for the first time examines insurer competition in the markets for point-of-service plans (POS), in addition to its annual analysis of health maintenance organizations (HMO) and preferred provider organizations (PPO).

"The broad scope of the new AMA analysis provides the most complete picture of the consolidation trend in health insurance markets," said AMA President Jeremy A. Lazarus, M.D. "The new data demonstrate that most areas of the country have a single health insurer with an anticompetitive share of the HMO, PPO or POS market."

The 2012 edition of AMA's Competition in Health Insurance: A Comprehensive Study of U.S. Markets is the largest analysis of its kind, reporting commercial health insurance market shares and market concentration levels for 385 metropolitan areas in all 50 states and the District of Columbia.

The AMA's latest findings regarding competition in the health insurance industry include:

  • A significant absence of health insurer competition is present in 70 percent of the metropolitan areas studied by the AMA. These markets are rated "highly concentrated," based on the 2010 Horizontal Merger Guidelines issued by the U.S. Department of Justice and Federal Trade Commission.
  • In 67 percent of the metropolitan areas studied by the AMA, at least one health insurer had an HMO market share of 50 percent or greater.
  • In 68 percent of the metropolitan areas studied by the AMA, at least one health insurer had a PPO market share of 50 percent or greater.
  • In 68 percent of the metropolitan areas studied by the AMA, at least one health insurer had a POS market share of 50 percent or greater.
  • Among the 50 states, the top 10 least competitive commercial health insurance markets are in: 1. Alabama, 2. Hawaii, 3. Michigan, 4. Delaware 5. Alaska, 6. North Dakota, 7. South Carolina, 8. Rhode Island, 9. Wyoming and 10. Nebraska. In each of these states, a single insurer accounted for a majority share of the health insurance market. For example, in Alabama a single insurer accounted for 88 percent of the state's health insurance market.

"It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power," the study notes, pointing to increased premiums, watered-down benefits and insurers' growing profitability as evidence that highly concentrated markets harm patients and physicians.

The AMA's Competition in Health Insurance: A Comprehensive Study of U.S. Markets is free to members. Non-members can purchase the study for $150. To order the study, please visit the AMA Bookstore online, or call (800) 621-8335 and mention item number OP427112.

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SA: Study cites few rivals in health insurance


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