Health insurance giants continue to dominate U.S. health insurance markets despite minor improvements in competition in Medicare Advantage and health-insurance exchange markets, says the AMA’s latest analysis of competition in health insurance.
The recently published AMA report, “Competition in Health Insurance: A Comprehensive Study of U.S. Markets” (PDF), shows that 97% of commercial metro area-level markets were highly concentrated in 2024, up from 95% in 2014. In Medicare Advantage, 97% of markets were highly concentrated in 2024—down from 99% in 2017.
“In the vast majority of metropolitan areas across the country, health insurers hold outsized market share—leaving patients with fewer choices and higher costs,” said AMA CEO and Executive Vice President John Whyte, MD, MPH. “When one or two companies call the shots, premiums rise, options shrink, and patients suffer. Strengthening competition—not consolidation—is the path to lower costs and improved access.”
The report’s authors analyzed 2024 data across 384 metropolitan areas, all 50 states, and the District of Columbia. They reviewed data on health-insurance enrollment from the Decision Resources Group, identifying the two largest insurers in each market and using 2023 federal merger guidelines to classify how concentrated those markets have become. Specifically, they used the Herfindahl-Hirschman Index (HHI) to measure market concentration and competition.
A “highly concentrated” market exceeds a regulatory threshold set by federal guidelines and lacks adequate health insurer competition. That is when the HHI is greater than 1800.
The last 11 years have seen an increase in average commercial market concentration.
“Between 2014 and 2024, 54% of commercial markets experienced an increase in the HHI, and in 25% of markets the increase was at least 500 points,” says the report, which notes that the average HHI rose by 164 points between 2014 and 2024. The average commercial market had an HHI of 3486.
Where an insurer holds the largest market share
A Blue Cross Blue Shield insurer continues to command the largest commercial market share in 84% of metro areas. Elevance Health was the largest insurer in 21% of metro areas. To illustrate how concentrated markets are, at least one insurer held a commercial market share of 30% or greater in 91% of metro areas. In 47% of metro areas, one health insurer held a market share of at least 50%.
The 10 states (PDF) with the least competitive commercial health insurance markets were:
- Alabama.
- Kentucky.
- Hawaii.
- Michigan.
- Louisiana.
- Illinois.
- Alaska.
- Vermont.
- Delaware.
- West Virginia.
The report is a product of the AMA Division of Economic and Health Policy Research, which conducts independent research on competition in health insurance, pharmacy benefit manager (PBM) and hospital markets. Learn more about the AMA’s research on competition in health care.
Medicare Advantage, exchanges
There were moderate decreases in Medicare Advantage market concentration over the last seven years, yielding relatively fewer local markets being highly concentrated. Most Medicare Advantage markets remain highly concentrated, however. In 90% of metro areas, at least one insurer held a market share of 30% or greater. For 24% of metro areas, one insurer's share was at least 50%.
Health-insurance exchange markets have seen rises and falls over the last 10 years. The HHI decreased in 2015, after their first year in operation, then rose steadily until 2018, reaching a high of 6873. Since that time, the HHI has fallen annually, down to 4201 in 2024. Despite these trade winds, the average market remains highly concentrated.
The report’s authors noted that drops in exchange-market concentration mediated and masked larger increases in overall commercial market concentration.
“In fact, excluding the exchanges from the analysis, between 2014 and 2024 the average HHI rose by 418 points,” the AMA report says.
