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
- Snapshots: A Comparison of the Availability and Cost of Coverage for Workers in Small Firms and Large Firms
- Implementing New Private Health Insurance Market Rules
- An Analysis of the Share of Medicare Beneficiaries Who Would Benefit from an Annual Out-of-Pocket Maximum under Traditional Medicare Over Multiple Years