Health insurance industry monopolizes the South
Conservatives and other opponents of the "public option" for health care say that it would hurt competition. But in fact, most health insurance markets fall under what the Department of Justice considers a "highly-concentrated market," or near-monopoly. Observers say in such cases, introducing another choice -- a public health insurance option -- would actually dramatically increase competition.A report released today shows that health insurance company mergers and industry consolidation have resulted in near-monopoly markets where a small number of large companies are able to control premium levels and benefit packages. Health care reform advocates point out that while insurers are thriving in the anti-competitive marketplace, shrinking competition among health insurance companies is a major cause of spiraling health insurance costs. Health insurance premiums have skyrocketed, going up more than 87% on average over the past six years, according to the report.
The Department of Justice considers a market "highly-concentrated" if one company holds more than a 42% share of that market, a level that is common in more than 30 other states. The report points out that 94% of insurance markets nationally are "highly-concentrated." Almost all Southern states suffer under such near-monopolies.
According to the report, insurer consolidation also disproportionately disadvantages rural states. In several rural states across the nation the two largest health insurers control at least 80% of the statewide market. In Alabama, for instance, the biggest insurer holds 89% of the statewide market, the highest rate in the nation for a single company. Even more populous states in the South have serious market concentration problems; Virginia's largest health insurer, for example, controls a 50% share of the statewide market.
The combined market share percentage of the top two insurers in each state in the South:
The Department of Justice considers a market "highly-concentrated" if one company holds more than a 42% share of that market, a level that is common in more than 30 other states. The report points out that 94% of insurance markets nationally are "highly-concentrated." Almost all Southern states suffer under such near-monopolies.
According to the report, insurer consolidation also disproportionately disadvantages rural states. In several rural states across the nation the two largest health insurers control at least 80% of the statewide market. In Alabama, for instance, the biggest insurer holds 89% of the statewide market, the highest rate in the nation for a single company. Even more populous states in the South have serious market concentration problems; Virginia's largest health insurer, for example, controls a 50% share of the statewide market.
The combined market share percentage of the top two insurers in each state in the South:
Alabama - 88Health care reform advocates are calling on the Department of Justice to investigate the health insurance industry. The report also underscores that a public health insurance option would force private insurance companies to compete -- bringing down cost, guaranteeing quality and setting a benchmark for coverage and transparency.
Arkansas - 81
Florida - 45
Georgia - 69
Kentucky - 69
Louisiana - 74
Mississippi - n/a
North Carolina - 73
South Carolina - 75
Tennessee - 62
Texas - 59
Virginia - 61
West Virginia - 54
