2024 AMA Report: U.S. Health Insurance Markets Face Severe Consolidation and Limited Options

The American Medical Association (AMA) released its latest report titled “Competition in Health Insurance: A Comprehensive Study of U.S. Markets.” This analysis highlights that many large health insurers control significant market shares, reducing competition and limiting choices for consumers in medical coverage across most metropolitan areas in the U.S.

Dr. Bruce A. Scott, president of the AMA, stated that many Americans feel they have no real options in areas with concentrated health insurance markets. He urged regulators, policymakers, and lawmakers to work together to reverse this trend and foster a more competitive marketplace for patients.

The analysis evaluated 382 metropolitan statistical areas (MSAs), along with data from all 50 states and the District of Columbia. It reported market shares for both commercial insurance and Medicare Advantage (MA) plans. The study also used the Herfindahl-Hirschman Index (HHI) to measure market concentration. Markets with an HHI over 1,800 are labeled “highly concentrated,” indicating insufficient competition among health insurers.

Commercial Markets

The report revealed that 95% of MSA-level commercial markets are highly concentrated, with HHIs exceeding 1,800. This level of concentration has remained stable since 2014, with nearly half of the previously concentrated markets becoming even more consolidated by 2023. The average commercial market HHI stands at 3,458. In 89% of MSAs, at least one insurer controls over 30% of the market, and in 47% of MSAs, one insurer holds at least 50%.

Blue Cross Blue Shield insurers dominate the market, holding the largest shares in 41 states and controlling 83% of MSAs. Elevance Health has the largest share in 21% of MSAs. Overall, UnitedHealth Group is the largest commercial health insurer in the U.S., while Centene leads in insurance exchanges.

Medicare Advantage (MA)

The analysis also found that MA markets exhibit similar patterns of high concentration. In 2024, 54% of Medicare beneficiaries were enrolled in MA plans, up from 19% in 2007. In 2023, 97% of MSA-level MA markets were labeled as highly concentrated. The average MA market HHI is 3,129. UnitedHealth Group again stands out, being the largest insurer at both the national level and in 43% of MSAs.

The report’s authors pointed out that U.S. health insurance markets have experienced high concentration for over a decade. They expressed concern about future industry consolidation, emphasizing that low competition leads to negative impacts for consumers and healthcare providers alike.