Dive Brief:
- According to a press release by the American Medical Association, WellPoint Inc.—soon to be Anthem—is the largest health insurer by market share in 82 of 388 metropolitan areas in the nation. In 41% of US metropolitan areas, WellPoint has at least a 50% share of the commercial health insurance market. The organization had a market share advantage in more than twice the number of metropolitan areas as its two closest competitors, Health Care Service Corp. and UnitedHealth Group.
- The results came from a study meant to help understand competition in heath insurance markets across the country. The purpose is to highlight markets where insurers' mergers and acquisitions may result in anti-competitive price hikes.
- The report found that nearly three-quarters of the metropolitan areas in the report are "highly concentrated," lacking insurer competition. 45 states had two health insurers that accounted for 50% or more of the commercial market; 17 states had a single insurer with 50% or more of the market share.
Dive Insight:
"The dominant market power of big health insurers increases the risk of anti-competitive behavior that harms patients and physicians, and presents a significant barrier to the market success of smaller insurance rivals," said AMA President Robert Wah. But this is not a new phenomenon. The industry, for years, has been one of low competition. The AMA's report from 2012 had very similar findings, with 70% of the markets highly concentrated.
And the industry is not one to take blame for rising healthcare costs. In a statement regarding the 2012 AMA study, Robert Zirkelbach, former spokesperson for America's Health Insurance Plans, said that "research clearly demonstrates that provider consolidation—not concentration of health plan markets—is driving up health care costs for consumers and employers."