The American Medical Association (AMA) has unveiled its 23rd edition and 2024 update of the pivotal market analysis titled “Competition in Health Insurance: A Comprehensive Study of U.S. Markets.” This extensive examination signifies a troubling trend: dominant health insurers across the vast majority of metropolitan areas are significantly consolidating their market shares, effectively diminishing competition and leaving consumers facing a limited array of health coverage options.
“In numerous highly concentrated health insurance markets, many Americans experience the daunting reality that their options for medical coverage are alarmingly restricted,” asserted Bruce A. Scott, MD, president of the AMA, during an AMA release. Dr. Scott further urged stakeholders, including regulators, policymakers, and lawmakers, to engage in critical discussions aimed at reversing the concerning trend of health insurance consolidation, advocating for a more transparent and competitive marketplace that ultimately benefits patients.
The economic analysis scrutinized 382 metropolitan statistical areas (MSAs) across all 50 states and the District of Columbia. The report meticulously detailed the commercial and Medicare Advantage (MA) market shares while utilizing the Herfindahl-Hirschman Indices (HHIs) for the leading two health insurance companies within each geographic market. Furthermore, it evaluated market concentration at both the state and MSA levels based on the revised Merger Guidelines set forth by the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC). Markets surpassing a critical regulatory threshold—specifically, an HHI of 1,800—are classified as “highly concentrated,” illustrating a significant dearth of competition among health insurers.
Commercial markets
The analysis illuminated a striking reality: an overwhelming 95% of MSA-level commercial markets were categorized as highly concentrated, exhibiting HHIs exceeding 1,800. Notably, this level of concentration has persisted consistently since 2014, remaining within a narrow band of 95% to 96%. Alarmingly, competition and choice continue to deteriorate, with nearly half (49%) of markets that were highly concentrated in 2014 becoming even more consolidated by 2023. Currently, the average commercial market showcases an HHI of 3,458, further reinforcing the trend. In 89% of MSA-level markets, at least one insurer commanded a commercial market share of 30% or more, while a staggering 47% of MSA-level markets revealed that one insurer possessed a share of no less than 50%.
Significantly, Blue Cross Blue Shield insurers claimed the largest state-level market shares in 41 states and dominated MSA-level market shares in 83% of the MSAs analyzed. Elevance Health (formerly known as Anthem) represented the largest MSA-level market share in 21% of regions. On a national scale, UnitedHealth Group emerged as the foremost commercial health insurer by market share in the United States, with Centene leading as the largest insurer in exchange markets.
Medicare Advantage (MA)
The economic analysis further revealed that Medicare Advantage (MA) markets exhibit a similar pattern of high concentration, with a concerning historical context. Over half (54%) of Medicare beneficiaries were enrolled in MA plans in 2024, a significant increase from just 19% in 2007. In 2023, a staggering 97% of MSA-level MA markets were marked as highly concentrated, a number that has fluctuated minimally between 97% and 99% since 2017. The average MA market displayed an HHI of 3,129, mirroring the concentration seen in commercial markets. UnitedHealth Group also dominated this arena, boasting a national-level share of 29% and the largest MSA-level market share, which was recorded at 43% of MSAs.
The report’s authors emphasized that a significant majority of U.S. health insurance markets have remained highly concentrated over the past decade. The continuing potential for further consolidation within the health insurance sector should raise alarms given the already low levels of competition prevalent in most regions. “[This], coupled with external evidence of their anticompetitive behavior, strongly indicates that health insurers are wielding considerable market power in numerous parts of the country, resulting in competitive detriment to both consumers and providers of care,” the authors concluded.
How can consumers effectively advocate for better health insurance options in a highly concentrated market, based on Dr. Scott’s recommendations?
## Interview with Dr. Bruce A. Scott, President of the American Medical Association
**Interviewer:** Thank you for joining us today, Dr. Scott. The recent AMA report reveals a concerning trend regarding the concentration of health insurance markets. Can you summarize the key findings and their implications for consumers?
**Dr. Scott:** Thank you for having me. The report indicates that a staggering 95% of metropolitan statistical areas (MSAs) are classified as having highly concentrated health insurance markets. This means that in many regions, consumers have limited choices for health insurance, which can lead to higher costs and reduced access to care. The concentration level has remained consistently high since 2014, highlighting a persistent lack of competition that is detrimental to patient welfare [[1](https://www.aha.org/news/headline/2023-12-13-study-commercial-health-insurance-markets-becoming-more-concentrated)].
**Interviewer:** That sounds alarming. What do you believe are the primary reasons for this consolidation among health insurers?
**Dr. Scott:** Several factors contribute to this consolidation. Mergers and acquisitions among health insurers have led to fewer players in the market. Larger companies benefit from economies of scale, but this often comes at the expense of consumer choice and competitive pricing. As the report shows, the dominance of insurers like Blue Cross Blue Shield and UnitedHealth Group in many areas exacerbates the issue, making it increasingly challenging for new entrants to compete [[1](https://www.aha.org/news/headline/2023-12-13-study-commercial-health-insurance-markets-becoming-more-concentrated)].
**Interviewer:** Given this situation, what actions do you think need to be taken by regulators and policymakers?
**Dr. Scott:** It’s crucial that regulators become more proactive in evaluating and blocking overly concentrated markets. We need to foster a healthier marketplace by promoting transparency and ensuring that consumers have access to a variety of insurance options. The stakeholders, including policymakers and lawmakers, must engage in meaningful dialogues to address these issues and push for reforms that protect patients [[1](https://www.aha.org/news/headline/2023-12-13-study-commercial-health-insurance-markets-becoming-more-concentrated)].
**Interviewer:** How can consumers protect themselves in such a consolidated market?
**Dr. Scott:** Consumers should stay informed about their options and advocate for their rights. Engaging with local health advocacy groups, understanding plan benefits, and comparing insurance options during open enrollment can help individuals make more informed choices. Additionally, supporting policies that promote competition in the insurance market is essential [[1](https://www.aha.org/news/headline/2023-12-13-study-commercial-health-insurance-markets-becoming-more-concentrated)].
**Interviewer:** Thank you, Dr. Scott, for sharing your insights on this critical issue. It’s clear that addressing market concentration is vital for improving health insurance options for consumers.
**Dr. Scott:** Thank you for highlighting this important topic. Ensuring a competitive health insurance market is a pressing issue that affects all Americans.
