WellPoint Dominates Nearly Half of Markets, AMA Says

The commercial payer enjoys a market share advantage in more than double the number of metropolitan areas as the next two insurers, says AMA survey data. America's Health Insurance Plans calls the findings "fatally flawed."

WellPoint Inc. does business in more markets than any other private plan in the United States and its size and dominance could spur anti-competitive practices, the American Medical Association says.

The AMA's annual survey of insurer competition found that WellPoint was the largest insurer by market share in 82 of 388 metropolitan areas examined.

WellPoint operates in metropolitan markets in 13 states, including: California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, New Hampshire, Nevada, Ohio, Virginia and West Virginia.

The commercial payer's commanding position in more than one in five metropolitan areas gives it a market share advantage in more than double the number of metropolitan areas as the next two insurers.

Health Care Service Corp. ranks second with a market share lead in 37 metropolitan areas, followed by UnitedHealth Group (UNH) with a market share lead in 35 metropolitan areas, AMA says in its study.

"The AMA is greatly concerned that in 41% of metropolitan areas, a single health insurer had at least a 50% share of the commercial health insurance market," AMA President Robert M. Wah, MD, said in prepared remarks.

"The dominant market power of big health insurers increases the risk of anti-competitive behavior that harms patients and physicians, and presents a significant barrier to the market success of smaller insurance rivals."

The AMA study is based on 2012 data from commercial enrollment in fully and self-insured plans, and includes participation in consumer-driven health plans. Key findings include:

• A significant absence of health insurer competition in 72% of the metropolitan areas. These markets are rated "highly concentrated," based on the guidelines used by the U.S. Department of Justice and Federal Trade Commission.
• 17 states had a single health insurer with a commercial market share of 50% or more.
• 45 states had two health insurers with a combined commercial market share of 50% or more.
• 10 states with the least competitive commercial health insurance markets were: 1. Alabama, 2. Hawaii, 3. Michigan, 4. Delaware, 5. Louisiana, 6. South Carolina, 7. Alaska, 8. Illinois, 9. Nebraska and 10. North Dakota.
• 10 states with the biggest drop in competition between 2011 and 2012 were: 1. Illinois, 2. Louisiana, 3. Indiana, 4. New Jersey, 5. New Hampshire, 6. Vermont, 7. Montana, 8. Wyoming, 9. Idaho and 10. Tennessee.

Clare Krusing, director of communications for America's Health Insurance Plans, in an email exchange, called the AMA findings "fatally flawed and debunked by leading health economists."

He says the AMA report "distracts from the serious harm posed to patients by provider consolidation and anti-competitive mergers."

"The evidence is overwhelming and clear: provider consolidation, not concentration of health plan markets, is leading to soaring costs for consumers and employers," Krusing says. "When hospitals and providers merge, particularly in already concentrated markets, individuals and families are facing price increases of up to 40%-50%."

"Consumers have wide range of choices when it comes to their coverage, and in fact, the federal government reports that consumers will have even more options this year."