Consolidation among health care industry players and lack of competition is once again raising red flags, this time in a report by the American Medical Association. The report, "Competition in Health Insurance: A Comprehensive Study of US Markets" finds that number of health insurance markets that are highly concentrated in the US increased from 71 percent in 2014 to 75 percent in 2018. The study said that 73 million Americans with commercial health plans live in highly concentrated markets and face limited choices of health insurance options. Related: Insurers to pay out record $1.3 billion in MLR rebates "Americans in three-quarters of commercial health insurance markets have a limited number of health insurers from which to choose," said AMA President Patrice A. Harris, M.D., M.A. "In almost half of metropolitan areas, a single health insurer has 50 percent or more of the market, and patients are not benefiting from this degree of market power. While health insurers grow corporate profits, networks are too narrow, premiums are too high, and benefits are too watered down."

Highly concentrated markets

Using federal measurements for antitrust guidelines, the AMA report finds that 75 percent of 382 metropolitan health insurance markets were highly concentrated. The average metro area had a market concentration measurement of 3504—more than 1000 points over the federal threshold for a highly concentrated market. The study noted that market concentration was also revealed by the fact that 91 percent of metro markets had a single insurer with a market share of at least 30 percent. The ten states that experienced the largest decrease in competition levels between 2017 and 2018 were: 1. Utah, 2. Louisiana, 3. Florida, 4. New Hampshire, 5. Alabama, 6. Alaska, 7. Iowa, 8. Tennessee, 9. Massachusetts, and 10. Wyoming. The five health insurers with the highest market share in the most Metropolitan Statistical Areas (MSAs) were: 1. Anthem (77 MSAs), 2. Health Care Service Corp. (42 MSAs), 3. UnitedHealth Group (27 MSAs), 4. Florida Blue (22 MSAs), and 5. Highmark (21 MSAs).

Health plan association responds

America's Health Insurance Plans (AHIP), the industry association representing commercial health plans, said in a statement to Fierce Healthcare that American consumers continue to have plenty of choice when it comes to choosing health insurance. "We support competition and choice for consumers—and in fact if you look at consumer choices in the employer, MA [Medicare Advantage], and even the individual market this year, there are lots of choices," AHIP said in its statement. "The role of insurance providers is to negotiate lower prices for consumers. We also sell our product based on a clear value proposition—people buy when we have a great product that covers the services and drugs that people need at a price they can afford. That buying equation and value proposition doesn't change—and that's what all plans are incented to deliver." Read more: 

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