Center for American Progress | 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.
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
Most American insurance markets dominated by one or two large companies
State
Health insurer with
largest market share
Market
share %
Health Insurer with
second largest
market share
Market
share %
Combined
market share
% of top two
insurers
Alabama Blue Cross Blue Shield AL 83% Health Choice 5% 88%
Alaska Premera Blue Cross 60% Aetna Inc. 35% 95%
Arizona Blue Cross Blue Shield AZ 43% UnitedHealth Group Inc. 22% 65%
Arkansas Blue Cross Blue Shield AR 75% UnitedHealth Group Inc. 6% 81%
California Kaiser Permanente 24% WellPoint Inc. (Blue Cross) 20% 44%
Colorado WellPoint Inc. (BCBS) 29% UnitedHealth Group Inc. 24% 53%
Connecticut WellPoint Inc. (BCBS) 55% Health Net Inc. 11% 66%
Delaware CareFirst Blue Cross Blue Shield 42% Coventry Health Care Inc. 23% 65%
District of Columbia Data Unavailable
Florida Blue Cross Blue Shield FL 30% Aetna Inc. 15% 45%
Georgia WellPoint Inc. (BCBS) 61% UnitedHealth Group Inc. 8% 69%
Hawaii Blue Cross Blue Shield HI 78% Kaiser Permanente 20% 98%
Idaho Blue Cross of ID 46% Regence BS of Idaho 29% 75%
Illinois HCSC (Blue Cross Blue Shield) 47% WellPoint Inc. (BCBS) 22% 69%
Indiana WellPoint Inc. (BCBS) 60% M*Plan (HealthCare Group) 15% 75%
Iowa Wellmark BC and BS 71% UnitedHealth Group Inc. 9% 80%
Kansas WellPoint Inc. (BCBS) 59% Health Partners 10% 69%
Kentucky Data Unavailable
Louisiana Blue Cross Blue Shield LA 61% UnitedHealth Group Inc. 13% 74%
Maine WellPoint Inc. (BCBS) 78% Aetna Inc. 10% 88%
Maryland CareFirst Blue Cross Blue Shield 52% UnitedHealth Group Inc. 19% 71%
Massachusetts Blue Cross Blue Shield MA 50% Tufts Health Plan 17% 67%
Michigan Blue Cross Blue Shield MI 65% Henry Ford Health System 8% 73%
Minnesota Blue Cross Blue Shield MN 50% Medica 26% 76%
Mississippi Data Unavailable
Missouri WellPoint Inc. (BCBS) 68% UnitedHealth Group Inc. 11% 79%
Montana Blue Cross Blue Shield MT 75% New West Health Services 10% 85%
Nebraska Blue Cross Blue Shield NE 44% UnitedHealth Group Inc. 25% 69%
Nevada Sierra Health 29% WellPoint Inc. (BCBS) 28% 57%
New Hampshire WellPoint Inc. (BCBS) 51% CIGNA Corp. 24% 75%
New Jersey Horizon Blue Cross Blue Shield 34% Aetna Inc. 25% 59%
New Mexico HCSC (Blue Cross Blue Shield) 35% Presbyterian Hlth 30% 65%
New York GHI 26% WellPoint Inc. (Empire BCBS) 21% 47%
North Carolina Blue Cross Blue Shield NC 53% UnitedHealth Group Inc. 20% 73%
North Dakota Data Unavailable
Ohio WellPoint Inc. (BCBS) 41% Medical Mutual of Ohio 17% 58%
Oklahoma BCBS OK 45% CommunityCare 26% 71%
Oregon Providence Health & Services 25% Regence Blue Cross Blue Shield 23% 48%
Pennsylvania Data Unavailable
Rhode Island Blue Cross Blue Shield RI 79% UnitedHealth Group Inc. 16% 95%
South Carolina Blue Cross Blue Shield SC 66% CIGNA Corp. 9% 75%
South Dakota Data Unavailable
Tennessee Blue Cross Blue Shield TN 50% Total Choice 12% 62%
Texas HCSC (Blue Cross Blue Shield ) 39% Aetna Inc. 20% 59%
Utah Regence Blue Cross Blue Shield 47% Intermountain Healthcare 21% 68%
Vermont Blue Cross Blue Shield VT 77% CIGNA Corp. 13% 90%
Virginia WellPoint Inc. (BCBS) 50% Aetna Inc. 11% 61%
Washington Premera Blue Cross 38% Regence Blue Shield 23% 61%
West Virginia Data Unavailable
Wisconsin Data Unavailable
Wyoming Blue Cross Blue Shield WY 70% UnitedHealth Group Inc. 15% 85%
Source: Health Care for America Now, available at http://hcfan.3cdn.net/dadd15782e627e5b75_g9m6isltl.pdf.