Competition in Health Insurance: A comprehensive study of U.S. markets

This is the 17th edition of the American Medical Association’s “Competition in health insurance: A comprehensive study of U.S. markets.” This report presents new data on the degree of competition in health insurance markets across the country, It is intended to help researchers, policymakers, and federal and state regulators identify markets where consolidation among health insurers may cause competitive harm to consumers and providers of care.

This study addresses the following questions: Are health insurance markets competitive, or do health insurers exercise market power? Are proposed mergers between insurers likely to maintain, enhance or create such power? These are important questions of public policy because the use of market power harms society in both output and input markets. When an insurer exercises market power in its output market (the sale of insurance coverage), premiums are higher than in a competitive market. When an insurer exercises market power in its input market (e.g. physician services), payments to health care providers are below competitive levels. In both settings, the quantity of insurance coverage provided is lower than in a competitive market. In short, the exercise of market power adversely affects health insurance coverage and health care.

– American Medical Association

Read the full study here.