The Division of Economic and Health Policy Research undertakes independent research and data analyses to produce unique AMA socioeconomic advocacy resources, such as the AMA’s Competition in Health Insurance study and AMA Policy Research Perspectives, for use by AMA physician leaders and staff, the Federation, physician members, and policymakers. The Division also conducts economic analyses and develops advocacy resources (e.g., SGR “gap” chart, state-level impacts, budget scoring analyses) in direct support of AMA federal, state, and private sector advocacy agendas (e.g., Medicare/SGR reform; medical liability reform, antitrust reform). The following reports come from this AMA unit and/or other AMA units working on key advocacy topics.
This is the 11th edition of the AMA's Competition in Health Insurance: A Comprehensive Study of U.S. Markets. This study presents new data on the degree of competition in different regions of the country. It is intended to help researchers, policymakers, and federal and state regulators identify areas where consolidation among health insurers may cause competitive harm to consumers and providers of care. It reports commercial health insurance market shares and concentration measures (HHIs) for 385 metropolitan areas, the 50 U.S. states and the District of Columbia. The U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) use this type of information to assess the anti-competitive effects of horizontal mergers. The 2012 Update is based on HealthLeaders-InterStudy’s Managed Market Surveyor, with enrollment data as of January 1, 2010.
There are two noteworthy changes in the analysis that underlies the statistics reported in the 2012 Update. First, we include enrollment in Point-of-Service (POS) plans. This means that the data for the combined product market (HMO+PPO+POS) from this year’s analysis are not perfectly comparable to those from earlier editions since those were limited to HMO+PPO enrollment. The addition of POS to the HMO+PPO category lowers the percentage of markets that are classified as highly concentrated. More importantly, the addition of POS allows for a more complete picture of health insurance markets.
Second, our data include participation in Consumer-Driven-Health-Plans (CDHP). HLIS clarified for us that their HMO, PPO and POS data include CHDP enrollment. Those lives are not reported as a separate plan type, rather they are "bolted on" to other product types, most frequently to PPO plans.
Key findings in this edition are that, based on the DOJ/FTC Horizontal Merger Guidelines, 70 percent of the 385 MSAs studied were highly concentrated (HHI>2,500). Additionally, in 89 percent of MSAs, at least one insurer held a commercial market share of 30 percent or greater.
In short, most commercial health insurance markets in the U.S. are highly concentrated. The results of this study should prompt federal and state antitrust authorities to more vigorously examine the anti-competitive effects of proposed mergers between health insurers.
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