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AMA: Insurers Consolidate at Patients’ Expense

New AMA study finds large health insurers dominate markets in many parts of the U.S.

For immediate release:
Jan. 26, 2009

CHICAGO “ The vast majority of health insurance markets in the U.S. are dominated by one or two health insurers, according to a new study by the American Medical Association (AMA) that examined insurer competition in markets across the country. Most alarmingly, in nearly all 314 metropolitan areas studied, there is evidence that patients and physicians have fewer options and are left vulnerable to the demands of the health insurer.

œWithout rivals to compete against, a large health insurance company can take advantage of patients by raising premiums and dictating important aspects of patient care without fear of losing business, said AMA President-elect J. James Rohack, MD. œThe U.S. Department of Justice recognizes that the quality of patient care can be harmed when a big insurer has a stranglehold on a market.

The AMA™s 2008 Competition in Health Insurance: A Comprehensive Study of U.S. Markets finds that 94 percent of metropolitan areas have a combined HMO+PPO commercial market considered œhighly concentrated according to the index used by federal regulators to assess anticompetitive markets. Examining the HMO and PPO markets separately, the AMA study finds that an even greater number of metropolitan areas are œhighly concentrated according to the federal index.

œHealth insurers claim that eliminating rivals through mergers creates greater efficiency and lower health care costs, but this just isn™t the case. Patient premiums, deductibles and co-payments have soared in this increasingly consolidated market, without an increase in benefits, said Dr. Rohack. œThe AMA urges federal and state agencies to enforce antitrust laws that prohibit harmful mergers and restore a competitive balance to health insurance markets.

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Competition in Health Insurance: A Comprehensive Study of U.S. Markets is free to AMA members, and available to the public for $150. To order the study, please visit the AMA Store online, or call (800) 621-8335 and mention AMA Store item number OP427108. Credentialed members of the media can obtain a free copy by contacting AMA Media Relations at: (312) 464-4430.

Media contact:

Lisa Lecas
AMA Media Relations
(312) 464-5980