According to a recent report from the Kaiser Family Foundation, the least competitive market for health insurance in the United States is in Alabama.
The Kaiser Family Foundation is a nonprofit health policy organization and released the report which showed that 86 percent of the policies in the individual market in Alabama were sold by Blue Cross Blue Shield. In the small group market in that state, that insurer sold 96 percent of the policies.
Though the report did indicate that individual insurers hold the majority of the insurance markets in 45 states, the individual and group plan figures in Alabama were significantly higher than the national averages, which were 54 and 51 percent, respectively.
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The report stated that the concentration in Alabama may be a result of the regulation differences and its population density.
According to the Kaiser Family Foundation’s senior vice president, Larry Levitt, who is also a co-author of the report, the more rural a state is, the more difficult it is for several competing plans to establish and differentiate themselves. He added that “More rural states are going to tend to have less competition, both in medical care service, and among insurers.”
The foundation also encouraged the different states to think about their market concentrations as they come up with their insurance exchange plans in compliance with the healthcare overhaul. These exchanges are the heart of the reforms and must be in place by 2014, to allow businesses and individuals to price and compare the available health insurance plans.