Insurer competition 'modest' in many states: study

Health insurers face “modest” competition in many states' individual and small group markets, according to a newly published study (PDF).

Research by the Henry J. Kaiser Family Foundation found a single insurer claimed at least half of the individual health insurance market in 30 states and the District of Columbia. Market share was measured by the number of people enrolled in a health plan. Among small group insurers, one insurer enrolled at least 51% of those covered in 24 states and the District of Columbia.

The study also used two other methods to measure market competition or the lack of it. Researchers scored the market consolidation for each state using the 10,000-point scale known as the Herfindahl-Hirschman Index. Markets without much competition fall on the scale at 2,500 or higher; 45 states ranked at least 2,500 for the individual market and 39 states did so for the small group market.

Finally, researchers counted how many insurers claimed at least 5% of their market. One health plan had at least 5% of the individual North Carolina health insurance market. Among small group insurers, Alabama reported just one health plan of a similar size. States with more plans—seven—that met the 5% threshold included Colorado, Georgia and Oregon for individual health plans and Oregon for small group plans.

The analysis used data from the National Association of Insurance Commissioners and the California Department of Managed Health Care. Mark Farrah Associates, a healthcare research company, compiled the data.