Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Health Insurance

GAO%3A Blues Dominate Many Small Group Markets

Your article was successfully shared with the contacts you provided.

Business owners with fewer than 50 employees in some states may feel as if they already buy health coverage through a single-payer health care system.[@@]

Researchers at the U.S. Government Accountability Office have published data supporting that conclusion in a report on competition in the small group health insurance market prepared at the request of Sen. Olympia Snowe, R-Maine; Sen. Christopher Bond, R-Mo.; and Sen. James Talent, R-Mo.

Regulators in 6 states could not or would not give the GAO researchers any small group market concentration statistics, and John Dicken, a GAO director, writes in a letter introducing the results of the study that regulators in California, New Hampshire, New Mexico and Pennsylvania did not respond to the survey. (After this story first appeared, Pennsylvania regulators wrote to say that they did respond to the GAO but did not have the requested small group market concentration information.)

Another 6 states told the GAO how many carriers were licensed to sell small group coverage in their jurisdictions but could not provide any market share data.

In theory, at least 3 carriers are licensed to sell small group health coverage in all of the jurisdictions that participated in the GAO survey.

But a single health insurance carrier accounted for at least 50% of 2004 small group sales in 9 of the 35 jurisdictions that provided small group market data, and a single carrier accounted for at least 75% of 2004 small group sales in 4 jurisdictions, according to the GAO researchers.

In most states, Blue Cross and Blue Shield companies are the biggest small group carriers, but a unit of UnitedHealth Group Inc., Minnetonka, Minn., is the biggest small group carrier in 6 jurisdictions.

Throughout the participating jurisdictions, the median market share of the largest small group carrier increased to 43% in 2004, from 33% in 2002, the GAO researchers write.

The median small group market share of all Blue Cross and Blue Shield companies in the reporting states increased to 44%, from 34%.

Dicken notes in the letter introducing the market share findings that the agency relied on help from regulators.

“We did not verify the information provided by the states,” Dicken writes.

A copy of the GAO report is on the Web at //


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.