By Shelby Livingston
Modern Healthcare, October 23, 2017
A single health insurance company dominates the commercial insurance market in more than 4 in 10 of the nation’s metropolitan areas, according to an analysis by the American Medical Association.
The study released Monday showed that competition among health insurers continues to shrink, despite several proposed mergers falling through earlier this year, including deals between Aetna and Humana, and Anthem and Cigna. Previous studies have shown that consolidation among insurers leads to lower payments for doctors and higher premiums for patients.
In 2016, a single insurer captured at least half of the commercial insurance market share in 43% of the 389 metro areas analyzed, according to the AMA. That’s up from 40% of metro areas in 2014. The AMA also said 89% of metro areas had at least one insurer with a commercial market share of 30% or more.
The findings are part of the AMA’s annual review of insurance market competition. It found that nearly 7 out of 10 commercial markets have a significant lack of competition, with 9 in 10 of the health insurance exchange markets lacking competition.
By Don McCanne, M.D.
Although we have by far the world’s highest health care costs we continue to rely on competition between private health insurers to bring costs down. But the AMA shows us once again that private health insurance markets are not competitive while per capita costs remain twice the average of other wealthy nations. So do we continue on the same path simply wishing that someday it would work?
We pay the private insurers a huge amount for their administrative services while tolerating the costly administrative burden that they place on the health care professionals and institutions. Since this hasn’t brought us lower costs through competition, then what are we actually purchasing with these extra payments? Plans with high deductibles and other cost sharing that erect financial barriers to care? Plans with narrow networks that take away choices of physicians and hospitals? Plans that manipulate markets to avoid more costly patients with greater needs? These are negatives, and we are paying extra for them?
The insurers need us, but we certainly don’t need them. It’s time to extricate ourselves from the capture by this industry. Let’s replace them with our own system – an improved Medicare for all – designed to help us get the health care we need, at costs that are reasonable.
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