AMA says many cities lack options for health care plans
One company said to have anticompetitive share in two-thirds of marketsDecember 6th, 2012
The American Medical Association released last month 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," says AMA President Dr. Jeremy A. Lazarus. "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 report finds a significant absence of health insurer competition in 70 percent of the metropolitan areas the organization studied. Those 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, and in 68 percent of the markets, at least one health insurer had a PPO market share of 50 percent or greater. In 68 percent of the metropolitan areas studied, at least one health insurer had a POS market share of 50 percent or greater.
The top 10 states with the least competitive commercial health insurance markets, in order of ranking, were Alabama, Hawaii, Michigan, Delaware, Alaska, North Dakota, South Carolina, Rhode Island, Wyoming, and Nebraska.
The top 10 states with the least competitive HMO markets, also in order of ranking, were Rhode Island, Alabama, Arkansas, Wyoming, Utah, Nebraska, Idaho, Nevada, North Dakota, and Washington.
The top 10 states with the least competitive PPO markets were Alabama, Michigan, Hawaii, South Carolina, Delaware, Indiana, Iowa, North Carolina, Nebraska, and Rhode Island.
The top 10 states with the least competitive POS markets were North Dakota, Rhode Island, Oklahoma, Alabama, Wisconsin, Tennessee, New Mexico, Vermont, Mississippi, and Ohio.
The AMA's Competition in Health Insurance: A Comprehensive Study of U.S. Markets is free to members. Non-members can purchase the study.