What do recent mergers of major health carriers mean for seniors? It might reduce the already-sparse competition that exists among private Medicare health plans, some consumer advocates worry.
An analysis by the Commonwealth Fund finds that 97 percent of U.S. markets for Medicare Advantage are "highly concentrated," meaning there is not significant competition.
The problem is particularly pronounced in rural areas, but competition is far from robust in densely-populated areas of the country. In the 100 counties with the highest number of Medicare beneficiaries, 81 percent are classified as uncompetitive by Commonwealth. Medicare Advantage, which seeks to provide private alternatives to traditional Medicare, has seen increasing participation in recent years, with 30 percent of seniors opting for the private plans.
Recommended For You
The report by Commonwealth is consistent with other studies that have described a lack of competition in the health insurance market. A recent report by the Government Accountability Office that examined competition in markets for individual insurance, small group insurance and large group insurance found that three large insurers cover over 80 percent of enrollees in all three markets.
The study authors suggest that while providing opportunities for private insurers to compete with traditional Medicare could yield cost-savings for seniors, the full benefit cannot be realized if the private market is dominated by a handful of insurance giants.
"Having more choice is good if they're real choices," Stuart Guterman, a Commonwealth executive and former Medicare official, told the New York Times.
The three insurers dominating the MA market are BlueCross affiliated plans, Humana and UnitedHealth. Among the 100 counties with the greatest number of Medicare enrollees, UnitedHealth is the dominant firm in 38 counties, while BlueCross and Humana are dominant in 13 and 12 counties, respectively. Kaiser Foundation plans are the biggest player in 9 of the counties, while Cigna and Tufs are each the biggest insurer in 5 percent of counties. Other insurers lead in the other 18 percent of markets.
Commonwealth concluded its report by suggesting that the private sector may not be able to lower Medicare costs in many parts of the country.
"The benefits of competition can be relied on only in markets where the elements of competition exist," the report said. "It is not clear that merely expanding the role of private plans would improve Medicare's ability to serve its beneficiaries, either in terms of the quality or cost of care."
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
