News: AMA report details health insurers’ monopolies on U.S. market
The American Medical Association (AMA) has released a comprehensive study on the state of competition in the United States’ health insurance market.
The study sought to answer two questions:
- “Are health insurance markets competitive or do health insurers possess market power,” and
- “[A]re proposed mergers involving insurers likely to maintain, enhance[,] or create such power?”
The report examined 381 metropolitan statistical areas (MSAs), in all 50 states across the U.S. (including the District of Columbia).
According to the report, in 2022, 73% of MSA-level commercial markets were considered “highly concentrated,” with the average commercial market also considered as such. The report also noted that in 90% of MSA-level markets, “at least one insurer had a commercial market share of 30% or greater,” and—that in nearly half of markets, in general (48%)—a single insurer’s share was at least 50%.
(The AMA also examined Medicare Advantage [MA] plans, as well, finding that “71% of MA markets were highly concentrated in 2022.”)
The researchers noted that these high concentration levels in health insurance markets are the likely result of corporate consolidations via mergers and acquisitions. This economic phenomenon, however, has resulted in outcomes that have been overwhelmingly poor for consumers.
“It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power—the ability to raise and maintain premiums above competitive levels—instead of passing of any benefits obtained through to consumers,” the report said.
Editor’s note: To read the AMA report, click here.