AMA study: Most cities lack competitive insurance markets

Most people live in areas without a competitive market for health insurance. Four out of five metro areas in the U.S. are virtual monopolies for individual health insurers. That’s the takeaway from a new study by the American Medical Association.

The AMA’s findings include:

• 83% of metropolitan markets were  “highly concentrated,” based on the newly revised Horizontal Merger Guidelines issued last year by the U.S. Department of Justice and Federal Trade Commission
• In about half of metropolitan markets, at least one health insurer had a commercial market share of 50% or more, and
• In half of the states reviewed in the study, the two largest health insurers had a combined commercial market share of 70% or more.

The 10 states with the least competitive commercial health insurance markets, are:

1. Alabama
2. Alaska
3. Delaware
4. Michigan
5. Hawaii
6. District of Columbia
7. Nebraska
8. North Carolina
9. Indiana
10. Maine.

The 2011 edition of the study, Competition in Health Insurance: A Comprehensive Study of U.S. Markets,  reports commercial health insurance market shares and federal concentration measures for 368 metropolitan markets and 48 states.