3 GAO discoveries about health insurer competition

The biggest gorillas in the U.S. commercial health insurance market got bigger from 2010 through 2012.

The gorillas in the individual market continued to gain share in 2013. Competition in the group market might have grown slightly, according to some measures, between 2012 and 2013.

John Dicken, a director at the U.S. Government Accountability Office (GAO), has published data supporting these conclusions in a new report on market concentration in the commercial health insurance market.

The GAO prepared the analyst for a group of lawmakers that included both Republicans and Democrats.

Some health policy watchers contend that one carrier comes to dominate the health insurance market in many states because the health insurance market is different from other markets, and the providers and patients may prefer to work with one great carrier, or just a few great carriers.

Critics of health insurance market concentration contend that a lack of competition may increase the cost of coverage and stifle innovation in some markets.

Many of the drafters of the legislation that became the Patient Protection and Affordable Care Act (PPACA) hoped to increase the level of competition in the health insurance market. Some PPACA measures that are supposed to increase competition started to take full effect in January this year. 

Those measures include the start of the PPACA public health insurance exchange system; the rise of the new nonprofit, member-owned CO-OP plans; and the birth of a Multi-State Plan program. In some states, officials may be able to use some PPACA tax credit subsidy money to create a new Medicaid-like buy-in program for the working poor. PPACA also requires the GAO to shed light on the issue, by studying concentration in the health insurance market.

To learn more about what GAO investigators found, read on.