AMA Study Reveals High Concentration in US Health Insurance Markets in 2024

A recent study by the American Medical Association (AMA) highlights the high levels of market concentration in both commercial and Medicare Advantage health insurance markets across the United States in 2024. According to the AMA, 97% of metropolitan statistical area (MSA) markets are highly concentrated, a slight increase from 95% in 2014, based on the Herfindahl-Hirschman Index (HHI) exceeding 1,800 points as per federal merger guidelines. This concentration reflects the dominance of a few large insurers, with one insurer holding at least 30% market share in 91% of MSAs and 50% or more in nearly half of these markets. The Medicare Advantage market also remains highly concentrated at 97%, though slightly down from 99% in 2017. The report attributes these concentration levels predominantly to consolidation through mergers and acquisitions, which reduce competition and can lead to higher premiums and fewer choices for consumers. The high barriers to entry in health insurance markets further protect incumbent insurers, enabling them to exercise significant market power. Nationally, UnitedHealth Group, Elevance Health, CVS (Aetna), and Cigna maintain the largest commercial market shares, though many insurers operate regionally or within individual states. For example, Blue Cross Blue Shield (BCBS) insurers, while having a modest national share individually, collectively dominate in 43 states and 84% of MSAs. The study identifies the ten states with the least competitive commercial insurance markets, including Alabama, Kentucky, Hawaii, and Illinois, among others. In Medicare Advantage, UnitedHealth Group leads with a 30% market share, followed by Humana, CVS, Kaiser Permanente, and Elevance Health. States with the least competitive Medicare Advantage markets include Wyoming, Washington, D.C., Rhode Island, and others. Overall, the AMA study underscores a trend of increasing market concentration in U.S. health insurance, with existing insurers expanding into other healthcare markets and services, which may further limit entry opportunities for new competitors. The AMA emphasizes that this market consolidation raises antitrust concerns that warrant attention from regulators to promote competitive dynamics that could lead to lower costs and broader access to care.