CHICAGO – Dominant health insurers in the vast majority of metropolitan areas across the United States have consolidated significant market share and driven away competition leaving consumers in local markets with a decade of very limited options for medical coverage, according to a new market analysis from the American Medical Association (AMA).

The 2024 edition of Competition in Health Insurance: A Comprehensive Study of US Markets (PDF) examined 382 metropolitan statistical areas (MSAs), the 50 states and the District of Columbia and tabulated commercial and Medicare Advantage (MA) market shares for the two largest health insurance companies in each of those geographic markets. It also analyzed state-and MSA-level market concentration according to measures used in federal merger guidelines issued in December 2023. Markets that exceed a regulatory threshold set by federal guidelines are considered “highly concentrated” and lack adequate health insurer competition.

The analysis calculated changes in MSA-level commercial market concentration between 2014 and 2023 and found health insurance markets have remained stubbornly highly concentrated over time, with the vast majority being so designated in the last 10 years. The share of commercial markets that are highly concentrated was 95% in both 2014 and 2023 and hovered between 95% and 96% in that 10-year period. Additionally, competition and choice have continued to fade for many patients as almost half (49%) of markets that were highly concentrated in 2014 grew more consolidated by 2023.

“For too many Americans living in highly concentrated health insurance markets, choosing medical coverage feels like having no choice at all,” said AMA President Bruce A. Scott, M.D. “The AMA strongly encourages a dialogue among regulators, policymakers, lawmakers, and others to reverse the trend toward health insurance consolidation and create a better, more open and competitive marketplace to benefit patients.”

Highlights from the AMA’s latest study of competition in commercial health insurance markets show:

• Under current federal guidelines, 95% of MSA-level markets were highly concentrated in both 2014 and 2023.
• In 89% (339) of MSAs, at least one insurer held a commercial market share of 30% or greater, and in 47% (181) of MSAs, one insurer's share was at least 50%.
• A Blue Cross Blue Shield (BCBS) insurer had the largest state-level market share in 41 states.
• A BCBS insurer had the largest MSA-level market share in 83% (317) of MSAs.
• Elevance Health (formerly Anthem) had the largest MSA-level market share in 21% (80) of MSAs.
• At the national level, UnitedHealth Group was the largest commercial health insurerby market share in the U.S. and Centene was the largest insurer by market share in the exchanges.
• The 10 states (PDF) with the least competitive commercial health insurance markets were: 1. Alabama, 2. Kentucky, 3. Michigan, 4. Louisiana, 5. Hawaii, 6. Illinois, 7. Alaska, 8. Delaware, 9. Vermont, 10. South Carolina.

Medicare Advantage markets are also highly concentrated and have remained so over time. In 2023, 97% of MSA-level MA markets were highly concentrated, and this proportion has hovered between 97% and 99% since 2017. Interestingly, as in commercial markets, UnitedHealth Group is also the largest insurer in the MA market, with a national-level share of 29%—up from 25% in 2017. Locally, it had the largest MSA-level market share in 43% (165) of MSAs.

The prospect of future consolidation in the health insurance industry must be viewed in the context of the low levels of competition in most health insurance markets. For more than 20 years, the AMA analysis has been a helpful resource to researchers, policymakers, and regulators as they work to identify markets where mergers and acquisitions involving health insurers may cause competitive harm to consumers and providers of care.

Competition in Health Insurance: A Comprehensive Study of U.S. Markets is a vital element of AMA’s continued antitrust advocacy to protect patients and physicians from anticompetitive harm and help regulators and lawmakers better scrutinize anticompetitive insurer behavior. Health insurance market concentration will continue to be a vital issue of public policy for the AMA and the nation’s patients and physicians. Additional content from the updated study is available for download from the AMA’s Competition in Health Care Research website.