Health Care Competition
Insurance Market Domination Leads to Fewer Choices
Ben Furnas and Rebecca Buckwalter-Poza June 2009
Today many Americans have few choices when it
comes to health insurance. This is because many
insurance markets are dominated by only a handful
of firms, even though there are over 1,000 private
health insurance carriers in the United States. This
concentration limits employers’ and families’ health
insurance options as well as the care they receive.
In many states small insurers compete against one
another in the individual market to insure only
low-risk, healthy individuals. They refuse to insure
Americans with pre-existing conditions such as
high blood pressure, asthma, cancer, or diabetes
and those who have ever taken certain prescription
drugs—and they create barriers to needed care for
those who are insured.
The table shows that in many states insurance
markets are dominated by only one or two insurance carriers. In at least 21 states, one carrier
controls more than half the market. More than half
of the market is controlled by two carriers in at
least 39 states. In 2007, a survey conducted by the
American Medical Association found that in more
than 95 percent of insurance markets, a single
commercial carrier controlled at least 30 percent of
the insurance market.1
The result of this market concentration is that health
insurance interests come before Americans’ health
care needs. Where markets are dominated by only
a few firms, health insurers revenues are growing
faster than health inflation as insurers maximize
rates they charge employers and families and create barriers to care.2 Employers are then unable
to afford meaningful health insurance options for
their employees or, in the case of small businesses,
are unable to offer their employees insurance at all,
while most Americans seeking health insurance in
the individual market never purchase coverage.
Most American insurance markets dominated by one or two large companies
State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Health insurer with Market
largest market share share %
Blue Cross Blue Shield AL
Premera Blue Cross
Blue Cross Blue Shield AZ
Blue Cross Blue Shield AR
Kaiser Permanente
WellPoint Inc. (BCBS)
WellPoint Inc. (BCBS)
CareFirst Blue Cross Blue Shield
Data Unavailable
Blue Cross Blue Shield FL
WellPoint Inc. (BCBS)
Blue Cross Blue Shield HI
Blue Cross of ID
HCSC (Blue Cross Blue Shield)
WellPoint Inc. (BCBS)
Wellmark BC and BS
Data unavailable
WellPoint Inc.
Blue Cross Blue Shield LA
WellPoint Inc. (BCBS)
CareFirst Blue Cross Blue Shield
Blue Cross Blue Shield MA
Blue Cross Blue Shield MI
Blue Cross Blue Shield MN
Data Unavailable
WellPoint Inc. (BCBS)
Blue Cross Blue Shield MT
Blue Cross Blue Shield NE
Sierra Health
WellPoint Inc. (BCBS)
Horizon Blue Cross Blue Shield
HCSC (Blue Cross Blue Shield)
GHI
Blue Cross Blue Shield NC
Data Unavailable
WellPoint Inc. (BCBS)
BCBS OK
Providence Health & Services
Data Unavailable
Blue Cross Blue Shield RI
Blue Cross Blue Shield SC
Data Unavailable
Blue Cross Blue Shield TN
HCSC (Blue Cross Blue Shield )
Regence Blue Cross Blue Shield
Blue Cross Blue Shield VT
WellPoint Inc. (BCBS)
Premera Blue Cross
Data Unavailable
WellPoint Inc.
Blue Cross Blue Shield WY
Combined
Health Insurer with
Market market share
second largest
share % % of top two
market share
insurers
83%
60%
43%
75%
24%
29%
55%
42%
Health Choice
Aetna Inc.
UnitedHealth Group Inc.
UnitedHealth Group Inc.
WellPoint Inc. (Blue Cross)
UnitedHealth Group Inc.
Health Net Inc.
Coventry Health Care Inc.
5%
35%
22%
6%
20%
24%
11%
23%
88%
95%
65%
81%
44%
53%
66%
65%
30%
61%
78%
46%
47%
60%
71%
Aetna Inc.
UnitedHealth Group Inc.
Kaiser Permanente
Regence BS of Idaho
WellPoint Inc. (BCBS)
M*Plan (HealthCare Group)
UnitedHealth Group Inc.
15%
8%
20%
29%
22%
15%
9%
45%
69%
98%
75%
69%
75%
80%
59%
61%
78%
52%
50%
65%
50%
Health Partners
UnitedHealth Group Inc.
Aetna Inc.
UnitedHealth Group Inc.
Tufts Health Plan
Henry Ford Health System
Medica
10%
13%
10%
19%
17%
8%
26%
69%
74%
88%
71%
67%
73%
76%
68%
75%
44%
29%
51%
34%
35%
26%
53%
UnitedHealth Group Inc.
New West Health Services
UnitedHealth Group Inc.
WellPoint Inc. (BCBS)
CIGNA Corp.
Aetna Inc.
Presbyterian Hlth
WellPoint Inc. (Empire BCBS)
UnitedHealth Group Inc.
11%
10%
25%
28%
24%
25%
30%
21%
20%
79%
85%
69%
57%
75%
59%
65%
47%
73%
41%
45%
25%
Medical Mutual of Ohio
CommunityCare
Regence Blue Cross Blue Shield
17%
26%
23%
58%
71%
48%
79%
66%
UnitedHealth Group Inc.
CIGNA Corp.
16%
9%
95%
75%
50%
39%
47%
77%
50%
38%
Total Choice
Aetna Inc.
Intermountain Healthcare
CIGNA Corp.
Aetna Inc.
Regence Blue Shield
12%
20%
21%
13%
11%
23%
62%
59%
68%
90%
61%
61%
52%
70%
United Healthcare
UnitedHealth Group Inc.
10%
15%
62%
85%
Source: Health Care for America Now, available at http://hcfan.3cdn.net/dadd15782e627e5b75_g9m6isltl.pdf.
Real health care reform, which includes the creation of a new public health insurance plan, will
encourage the type of competition that benefits patients, employers, and health care providers. As a new
competitor in consolidated insurance markets, the public plan will force private insurers to compete on
price and value and require them to increase accountability and efficiency. The ultimate result of vigorous competition will be to give American families more and better choices.
Endnotes
1 American Medical Association, “2007 Update: Competition in Health Insurance, A Comprehensive Study of US Markets: 2007 Update,” available at http://www.ama-assn.org/ama1/pub/upload/mm/368/compstudy_52006.pdf.
2 Peter Harbage and Karen Davenport, “Competitive Health Care: A Public Health Insurance Plan that Delivers Market Discipline” (Washington, D.C.: Center for American Progress Action Fund, March 2009), available at http://www.americanprogressaction.org/issues/2009/03/pdf/competitive_health.pdf
Center for American Progress | Health Care Competition