Health Insurance Monopolization Now Complete

By FireDogLake's David Dayen 33 Comments

The American Medical Association, in a new report, shows that almost every single health insurance market in America is “highly concentrated”.

In 24 of the states, the two largest insurers had a combined market share of 70 percent or more. Last year, 18 of 42 states had that type of market situation.

Among the other findings:

• In 54 percent of metropolitan markets, at least one insurer had a market share of 50 percent or more — up from 40 percent of metropolitan markets the year before.
• In 92 percent of metropolitan markets, at least one insurer had a share of 30 percent or more — up from 89 percent of metropolitan markets the year before.
• Ninety-nine percent of metropolitan markets are highly concentrated, according to federal merger guidelines, compared with 94 percent the year before.

99% of all health insurance markets are highly concentrated. That hasn’t been seen in an entire sector since the Gilded Age.

When markets are highly concentrated, consumers have no choice but to accept extreme rate hikes, denial of benefits and other industry games. And that’s exactly what’s happened in recent years. The Affordable Care Act seeks to solve this problem by fostering competition in the exchanges, but without a renewed effort to break insurance monopolies throughout all insurance markets, including the large-group sector, consumers will continue to get screwed.

The President of the AMA, Dr. J. James Rohack, reacted to this report by calling on the Justice Department to enforce anti-trust laws prohibiting “harmful mergers.” Central to that would be a repeal of the insurance industry’s anti-trust exemption. A bill to that effect passed the House earlier this year. It has, say it with me, stalled in the Senate.