The American Medical Association found that this was the case in 73 percent of MSAs.
A new American Medical Association (AMA) study has revealed that almost three out of every four metropolitan statistical areas (MSAs) are concentrated health insurance markets.
The analysis was based on data from the Department of Justice and Federal Trade Commission.
The AMA’s study revealed that 73 percent of MSAs were highly concentrated health insurance markets based on the horizontal merger guidelines from the Department of Justice and the Federal Trade Commission (FTC). In 91 percent of those markets, 30 percent or more of the market share belonged to one insurer. Moreover, in 46 percent of the markets, there was a market share of at least 50 percent held by a single payer.
There was a rise in concentration index of at least 500 points among 21 percent of the markets, and 57 percent of the markets saw the concentration index rise to some degree.
The AMA pointed to the way mergers could continue to impact this concentrated health insurance markets trend.
“As merger rumors involving health insurers swirl, the prospect of future consolidation in the health insurance industry should be more closely scrutinized given the low levels of competition in most health insurance markets,” said Gerald E Harmon, M.D., president of the AMA. “For two decades, the AMA study has been helping researchers, lawmakers, policymakers, and federal and state regulators identify markets where consolidation involving health insurers may cause competitive harm to consumers and providers of care.”
There was an increase from 71 percent to 74 percent in the overall share of highly concentrated markets from 2014 to 2020, said the AMA report. It determined that this included markets that had already been considered to be highly concentrated in 2014, as this level became even greater by 2020 in 54 percent. Additionally, 26 percent that had not been deemed highly concentrated at the start of this period became so by 2020, according to the report.
The researchers pointed out that as consolidation and mergers continue to be a trend, the results of this health insurance markets study should raise red flags regarding antitrust issues.
