Press Releases

New study shows Medicare Advantage markets lack competition

Nov 1, 2022 - American Medical Association

CHICAGO - Competition is sparce in Medicare Advantage markets where private health insurance companies offer eligible consumers an alternative to traditional Medicare, according to the annual study of competition in health insurance markets published by the American Medical Association (AMA).

The 2022 edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets for the first time examines Medicare Advantage markets in 380 metropolitan statistical areas (MSAs) and presents the two largest insurers' market shares and market concentration levels as measures of competition. Nearly 4 out of 5 (79%) MSAs had Medicare Advantage markets with low levels of competition as these local-level markets ranked “highly concentrated” according to federal guidelines.

“High levels of market concentration can result in diminished competitive constraints on insurers,” said AMA President Jack Resneck, Jr., M.D. “Unchecked market power among insurers is a formula for higher premiums, lower coverage, and inadequate levels of patient care, concerns of great relevance to Medicare Advantage. Most large Medicare Advantage insurers are accused of fraud and flouting the authority of federal agencies. The new AMA study shines a light on the lack of competition in Medicare Advantage markets across the country and will help regulators and lawmakers better scrutinize anticompetitive insurer behavior that harms patients and physicians in an industry where exploitative business practices are already commonplace.”

With the addition of Medicare Advantage markets, the annual AMA study continues to offer the largest and most complete picture of competition in health insurance markets for metropolitan areas across the country, as well as all 50 states and the District of Columbia. In addition to Medicare Advantage enrollment, the study is based on 2021 data captured from commercial enrollment in preferred provider organization (PPO), health maintenance organization (HMO), point-of-service (POS), consumer-driven health plans (CDHP), and public health exchanges.

Similar to Medicare Advantage, the vast majority of commercial markets at the MSA-level are also highly concentrated. Three out of four MSAs had commercial markets with low levels of competition as these local-level markets ranked “highly concentrated” according to federal guidelines. The study notes insurers had large market shares in both commercial and Medicare Advantage markets. According to the latest data, UnitedHealth Group is the largest insurer in both markets. CVS Health (owner of Aetna) is the third largest in both markets. Kaiser Permanente, Blue Cross Blue Shield of Michigan and Highmark also appeared among the top 10 largest insurers in both markets.

Highlights from the AMA’s latest study of competition in health insurance markets show:

Commercial Markets

Medicare Advantage Markets

Competition in Health Insurance: A Comprehensive Study of U.S. Markets is a vital element of AMA’s continued antitrust advocacy to protect patients∥nd physicians from competitive harm. Health insurance market concentration will continue to be a vital issue of public policy for the AMA, the federation of medicine, and the nation’s physicians and patients. Additional content from the updated study is available for download from the AMA’s Competition in Health Care Research website.

About the American Medical Association

The American Medical Association is the physicians’ powerful ally in patient care. As the only medical association that convenes 190+ state and specialty medical societies and other critical stakeholders, the AMA represents physicians with a unified voice to all key players in health care. ゝhe AMA leverages its strength by removing the obstacles that interfere with patient care, leading the charge to prevent chronic disease and confront public health crises and, driving the future of medicine to tackle the biggest challenges in health care.