Consolidation among health insurers has damaging effects on independent physician practices and their patients, according to the American Medical Association’s new report, “Competition in Health Insurance: A Comprehensive Study of U.S. Markets.”
AMA researchers analyzed data from 2024 across 384 metropolitan areas, all 50 states and the District of Columbia for the study, and found that the vast majority of health insurance markets are highly concentrated.
Here are five takeaways from the study:
1. Based on merger guidelines from the Department of Justice and Federal Trade Commission, 97% of metropolitan statistical area commercial markets were highly concentrated, up slightly from 95% in 2014.
2. In at least 91% of MSA-level markets, at least one insurer had a commercial market share of 30% or greater.
3. In 47% of markets, a single insurer’s share was at least 50%.
4. Fifty-four percent of markets experienced a significant increase in concentration in 2024.
5. The average Herfindahl-Hirschman Index, a measurement of a firm’s market concentration, fluctuated in both directions in the intervening years. However, because there were more increases than decreases, and the decreases were smaller, the average HHI rose by 164 points between 2014 and 2024. According to the AMA, the decreases were generally driven by the exchanges, which tempered and masked larger increases in concentration.
