AMA Says Insurers Are Using Their Market Power to Screw Patients and Providers

When I started this Healthcare Blame Game series I didn’t think the rounds would pop up on a near-weekly cadence, but here we are.

The series is based on my idea that incumbent healthcare industry stakeholders take turns blaming each other for high costs, limited access and poor quality while agreeing amongst themselves to not really do much about it lest they blow up the status quo that’s made their respective sectors all very profitable.

This week’s episode in the long saga is thanks to the American Medical Association (again) and the AMA’s latest annual report on health insurance market consolidation. The AMA released its report, Competition in Health Insurance: A comprehensive study of U.S. markets, on Nov. 19.

The 74-page report is based on 2023 health insurance enrollment data from 382 metropolitan statistical areas (MSAs) in 50 states and the District of Columbia. Here’s what the report said:

• 364 of the MSAs, or 95%, were considered “highly concentrated” under the antitrust merger guidelines used by the U.S. Justice Department and the Federal Trade Commission.
• In 181 of the MSAs, or 47%, one health insurer controlled more than 50% of the market.
• 372 of the MSAs, or 97%, the Medicare Advantage market was highly concentrated.
• In 116 of the MSAs, or 30%, one health insurer controlled more than 50% of the MA market alone.

I’ll let the report do the rest of the talking at this point.

“High concentration levels in health insurance markets are largely the result of consolidation (i.e., mergers and acquisitions), which can lead to the exercise of market power and, in turn, harm to consumers and providers of care. Both consummated and proposed mergers and acquisitions involving health insurers should raise serious antitrust concerns,” the report said.

Further: “Conceptually, mergers and acquisitions can have beneficial and/or harmful effects on consumers. However, only the latter has been observed. It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power—the ability to raise and maintain premiums above competitive levels—instead of the passing of any benefits obtained through to consumers.”

In short, insurers are using their market power to screw patients and providers and enrich themselves. I’m less polite than the AMA, but we’re saying the same thing. Hey, that would make a good headline for this post. So be it.

If you want to read more installments in this series, check out:

• “AMA Draws Blood With Policy on Hospital Tax Exemptions”
• “It’s Big Pharma’s Turn to Point the Finger”
• “It’s Not Me, It’s You”
• “Health Insurance and Drug Company Execs Must Be Chuckling Over Antitrust Enforcement of Providers”
• “No, It’s Your Turn to Throw Me Under the Healthcare Bus”
• “Playing the Information Blocking Blame Game”