The Patient Protection and Affordable Care Act (PPACA) requires the GAO to study competition and market concentration in the health insurance market. This study examined
the individual, small group, and large group health insurance markets prior to the implementation of key PPACA provisions that went into effect in 2014 and that could have an effect on competition and market concentration among health insurers.
The study found that while several insurers participated in each state’s individual, small group, and large group health insurance markets in 2013, enrollment was concentrated among the three largest insurers in most states. On average in each state, there were several insurers participating, with about twice as many insurers participating in the individual market (24) as the small group (12) and large group (11) markets.
Interestingly, the three largest insurers had at least 80 percent of the total enrollment in at least 37 states. Further, in more than half of these states, a single insurer had more than half of the total enrollees and in 5 of these states there was at least one market segment in which the largest insurer had at least 90 percent of all the enrollees. For example, in Alabama’s small group market, the largest insurer—Blue Cross and Blue Shield of Alabama—had 97 percent of the total enrollment in the state.
The study also looked at the largest insurers in each state and found that the same insurers remained the top insurers by market share throughout the 2010-2013 time period. Of the 50 states we analyzed, the largest insurer remained the same in 43 states in the individual market, 41 states in the small group market, and 43 states in the large group market.
The study notes that Blue Cross and Blue Shield was the largest insurer in each of the market segments from 2010 through 2013, holding the majority share of 44 states in the individual market, 38 states in the small group market, and 40 states in the large group market across the time period.