‘Stubbornly’ High Concentration Dominates Insurance Markets, AMA Says
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Nov 27, 2024
Merger and acquisition (M&A) activity among insurers has led to “stubbornly” high concentration in insurance markets, according to a report from the American Medical Association. And while the Department of Justice (DOJ) has put a damper on horizontal mega-mergers, many insurers are going vertical.
The report, titled Competition in Health Insurance: A Comprehensive Study of US Markets, analyzed insurance market share in 382 metropolitan statistical areas (MSAs), the 50 states, and the District of Columbia between 2014 and 2023. During that period, the share of commercial insurance markets that were highly concentrated hovered between 95% and 96%. Forty-nine percent of markets that were highly concentrated in 2014 were even more consolidated by 2023. In 89% of MSAs, at least one insurer held a market share of 30% or greater. One insurer’s market share was at least 50% in 47% of MSAs. And 69% of the markets that were not highly concentrated in 2014 experienced an increase large enough to consider them highly concentrated by 2023.
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