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Health
Insurance Markets Dominated by Fewer,
Larger Insurers
Report Updates Information on State Markets
Washington—HMOs
continue to dominate the group insurance market, but Blue
Cross Blue Shield (BCBS) plans are gaining market share, according
to a report recently released by The Robert Wood Johnson Foundation’s
State Coverage Initiatives (SCI) program. BCBS group premium
volume grew 43 percent and their individual premiums nearly
doubled, as a growing number of BCBS plans converted to for-profit.
Reflecting gains in market share and consolidation, the average
BCBS plan (measured by earned premiums in the group and individual
market) was more than 3 times as large as the average HMO.
With
markets already concentrated in the hands of a few large insurers,
the largest carriers typically gained market share between
1997 and 2001. One to three insurers dominated the market
in nearly every state. The largest insurer held at least half
of the group market in 12 states and at least half of the
individual market in 34 states. In four states—Alabama,
Alaska, Hawaii, and North Dakota—the largest insurer
held at least 75 percent of the group market. BCBS plans dominated
the group market in 20 states and the individual market in
39 states.
“The
rising cost of health care and health insurance underlies
an ongoing restructuring of health insurance markets in many
states, as insurers seek to gain premium volume and market
share,” says Deborah Chollet, Ph.D., lead author of
the report and senior fellow at Mathematica Policy Research,
Inc. “Recognizing market change as a broad phenomenon
is essential to developing state policy to manage concentrated
markets effectively.”
Mapping
State Health Insurance Markets, 2001: Structure and Change
examines national trends in state insurance markets—including
changes in the number of insurers, premium volume, and market
concentration—between 1997 and 2001. It provides state-specific
market characteristics in the context of national trends.
An
electronic version of the report can be accessed at www.statecoverage.net/pdf/mapping2001.pdf.
Hard copies can be obtained by e-mailing sci@academyhealth.org.
Dr.
Chollet provides technical assistance to states through her
role as senior consultant to SCI. She conducts and manages
research on private health insurance coverage, markets, and
regulation—including employer-sponsored health plans
for workers and retirees, individual health insurance plans,
and Medicare supplemental plans.
SCI
helps states improve the availability and affordability of
health insurance coverage through grants, technical assistance,
workshops, and information on best practices. AcademyHealth
is the national program office for SCI.
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