A new study from the American Medical Association says that the small amount of competition among health insurers in local markets is fast disappearing. The study found that in most places, one or two insurers dominated.
For example, the 46-page report found that Aetna had 82 percent of Camden, NJ residents who were health management organization members. Horizon Blue Cross Blue Shield had 12 percent of Camden’s HMO market. Those two insurers also dominated the preferred provider market with Aetna holding 52 percent of the market share to Horizon’s 24 percent.
Similarly, the AMA report said Aetna and United Health Care controlled 43 percent and 22 percent of combined HMO-PPO market-share in the Wilmington, Delaware metropolitan area respectively.
Data from Pennsylvania and seven other states were not included in the report. An AMA spokesman said it has been difficult to get reliable data from Pennsylvania in recent years. Independence Blue Cross and Aetna have dominated the Philadelphia area market for decades.
In 24 of the 42 states and the District of Columbia that were included in the report titled “Competition in health insurance: A comprehensive study of U.S. markets” the two largest insurers combined to control 70 percent or more of the insurance market.
“The near total collapse of competitive and dynamic health insurance markets has not helped patients,” said J. James Rohack, the AMA’s president, in a statement.
The study strikes a similar theme as recent reports by the Obama Administration that has criticized health insurance markets. The President’s health care proposal released yesterday seeks to exert federal oversight over health insurance rate hikes.
“As demonstrated by proposed rate hikes in California and other states, health insurers have not shown greater efficiency and lower health care costs, “ Rohack said. “Instead, patient premiums, deductibles and co-payments have soared without an increase in benefits in these increasingly consolidated markets.