How Competitive Are State Health Insurance Markets?
Beginning in 2014, state-based health insurance exchanges will be created to facilitate coverage and choice, with the hope that enhanced competition among insurers will help to moderate premiums for individuals and small groups. This analysis by the Foundation assesses the competitiveness of state insurance markets for individuals and small businesses to establish a baseline as implementation of the health reform law proceeds and to provide context for the policy decisions states will be considering.
The analysis finds that while substantial variation exists in insurance market competition, a single insurer dominated at least half of the individual market in 30 states and the District of Columbia. In the small group market, a single insurer accounted for at least half of the market share in 26 states and D.C.
The analysis identified that the market share of the largest plan in the small group market ranged from less than 24% in Oregon and Pennsylvania to 96% in Alabama; in the individual market, the market share held by one plan ranged from 21% in Wisconsin to 86% in Alabama. The analysis also found that states in the West generally had more competitive markets, while more rural states in the upper Midwest and parts of the South and Mid-Atlantic were generally less competitive. The level of competition in a state was similar in the small group and individual markets, with a few exceptions.
Issue Brief (.pdf)
also of interest
- Quick Take: Essential Health Benefits: What Have States Decided for Their Benchmark?
- Health Insurance Market Reforms: Pre-Existing Condition Exclusions
- Health Insurance Market Reforms: Guaranteed Issue
- Survey of Health Insurance Agents: Assessing Trends in the Individual and Small Group Insurance Markets