Special Feature

More competition needed in health insurance markets

Physicians who practice in Alabama are doing so in the least competitive commercial health insurance market in the nation, according to data reported by the AMA.

That assessment is part of the AMA’s Competition in Health Insurance: A Comprehensive Study of U.S. Markets. According to the 10th annual report, the next nine states or areas with the least competitive commercial health insurance markets are:

2. Alaska
3. Delaware
4. Michigan
5. Hawaii
6. District of Columbia
7. Nebraska
8. North Carolina
9. Indiana
10. Maine

In each of these states, a single health insurer accounts for nearly 60 percent of the combined health maintenance organization (HMO) and preferred provider organization (PPO) market. For example, in Alabama a single insurer accounts for 90 percent of the state’s HMO/PPO market.

The report also concluded that anti-competitive conditions exist in 83 percent of the 368 metropolitan areas studied by the AMA. In about half of the metropolitan areas studied, at least one health insurer had a commercial market share of 50 percent or more.

This lack of competition is oftentimes caused by consolidation of health insurers, and it threatens health care delivery across the country, leading to access to care being compromised and lower payment rates for physicians.

The AMA actively opposes proposed health insurer consolidation, particularly when it threatens to cause adverse anti-competitive effects on consumers and providers of care. The AMA works with state medical societies to mount challenges through numerous avenues, including litigation, advocacy before state and federal regulatory agencies, and testimony before state and federal legislators.

For example, in 2010, the AMA was instrumental in blocking a planned merger between a subsidiary of Blue Cross Blue Shield of Michigan and a Lansing, Michigan-based hospital system’s health plan. The AMA also played a crucial role in compelling Highmark Inc. and Independence Blue Cross to discontinue a proposed merger in Pennsylvania in 2009. In addition, the AMA last fall submitted a statement on health care consolidation to the U.S. House Ways and Means Health Subcommittee.

Learn more about what the AMA is doing to prevent consolidation that faciliates anti-competitive conduct by health insurers.

Competition in Health Insurance is available for purchase through the AMA Bookstore. AMA members can access it for free; if you’re not a member, join today.