The level of competition in the U.S. commercial health insurance market has dwindled since 2010, when the Affordable Care Act (ACA) came to life.
Analysts at the GAO have published data supporting that conclusion in a new private health insurance market concentration study.
The analysts prepared the report because of an ACA provision that requires the GAO to brief Congress on health insurance market concentration every two years. ACA drafters hoped the new programs and subsidies created by the new law, such as the ACA public exchange program, and the Consumer Operated and Oriented Plan Program, would cut the cost of health coverage, and improve the quality, by increasing the level of competition.
- A copy of the GAO analysis of private health insurance market concentration is available here.
- An article about an American Medical Association analysis of competition in the commercial health insurance sector is available here.
The analysts who prepared the new report look only at the period from 2011 through 2018, for all 50 states and the District of Columbia.
For some sections of the report, they use data from HealthCare.gov, the agency that operates ACA public exchange services for states that are unwilling or unable to set up their own ACA public exchange programs. The analysts do not look directly at the impact of HealthCare.gov or other ACA programs, or at the effects of efforts by members of Congress and the administration of President Donald Trump to limit or shut down ACA subsidy programs.
The GAO analysts defined a market as being highly concentrated if the top three issuers in the market accounted for 80% or more of the enrollment in that market.
In the individual major medical insurance market, for example, in 2011, 33 of the 51 jurisdictions studied had highly concentrated markets.
The number of highly concentrated markets increased to 41 in 2014, when the ACA exchange market came to life.
The number of highly concentrated markets fell to 37 in 2015 and 2016, increased to 39 in 2017, and then rose to 46 in 2018.
The level of market concentration increased the most in Indiana, Washington state and Texas and decreased the most in Ohio, Colorado and Kansas, according to the GAO analysts.