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Life Health > Health Insurance > Your Practice

GAO: Small Group Concentration Worse

By Allison Bell

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On average, the dominant carriers in the U.S. small group health insurance market had even greater market share in 2008 than they did in 2005.

John Dicken, a health care director at the U.S. Government Accountability Office, gives that assessment in a report comparing the results of the GAO’s 2008 small group market concentration survey with the results from similar surveys conducted in 2002 and 2005.

The GAO prepared the report at the request of four members of the Senate, including Sen. Olympia Snowe, R-Maine, the highest-ranking Repulican on the Senate Small Business and Entrepreneurship Committee.

The GAO looked at the small group market in the 39 participating states on a state-by-state basis.

The median number of licensed carriers in each state’s small group market was 27, and the
market share of each state’s dominant small group player ranged from 21% in Arizona to 96% in Alabama, Dicken writes.

The median market share of the largest carrier in each state’s small group increased to 47% in 2008, up from 43% in 2005 and up from 33% in 2002, Dicken writes.

The GAO also looked at the combined market share of the 5 largest small group carriers in each state.

The 5 largest small group carriers accounted for at least 75% of the small group market in 34 of the 39 states that supplied the requested information, and they accounted for at least 90% of the small group market in 23 of those 39 states, Dicken writes.

In 2005, the 5 largest small group carriers accounted for 75% of the small group market in only 26 of the 34 states that were included in the review that year, Dicken writes.

A copy of the GAO report is available here.

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