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GAO: Private health insurance markets are increasingly concentrated

November 16, 2020

Topics: Quote of the Day

GAO, November 2020

What GAO Found

Enrollment in private health insurance plans in the individual (coverage sold directly to individuals), small group (coverage offered by small employers), and large group (coverage offered by large employers) markets has historically been highly concentrated among a small number of issuers. GAO found that this pattern continued in 2017 and 2018. For example:

  • For each market in 2018, at least 43 states (including the District of Columbia) were highly concentrated.
  • Overall individual and small group markets have become more concentrated in recent years. The national median market share of the top three issuers increased by approximately 8 and 5 percentage points, respectively, from 2015 through 2018. With these increases, the median concentration was at least 94 percent in both markets in 2018.

GAO found similar patterns of high concentration across the 39 states in 2018 that used federal infrastructure to operate individual market exchanges— marketplaces where consumers can compare and select among insurance plans sold by participating issuers—established in 2014 by the Patient Protection and Affordable Care Act (PPACA) and known as federally facilitated exchanges. From 2015 through 2018, states that were already highly concentrated became even more concentrated, often because the number of issuers decreased or the existing issuers accrued the entirety of the market share within a state. In 2017 and 2018 all 39 states were highly concentrated.

https://www.gao.gov…

Full report (59 pages):
https://www.gao.gov…


GAO: Private health coverage remains concentrated among largest insurers

American Hospital Association, November 13, 2020

Enrollment in private health insurance plans remained concentrated among a small number of issuers in 2017 and 2018, according to a report released today by the Government Accountability Office. The three largest issuers continued to hold 80% or more of the large group, small group and individual market in at least 43 states, with 10 states seeing an increase in concentration in the individual and small group markets since 2011, GAO found. The Affordable Care Act requires GAO to report on changes in the concentration of enrollment among issuers in overall individual, small group and large group markets, and individual and small group exchanges.

“The GAO’s findings underscore concerns expressed by hospitals and health systems: highly concentrated insurance markets reduce patient choice, endanger patient care and increase their costs,” said Molly Smith, AHA’s vice president for coverage and state issues. “This allows health plans to adopt policies that benefit them financially and not patients. Such lack of competition encourages plans to pull a bait-and-switch on patients: delaying and denying medically necessary care that patients paid for through their premiums and changing coverage rules mid-year.”

https://www.aha.org…


Fact Check: Does Joe Biden Want To Eliminate Private Health Insurance?

By Jocelyn Grzeszczak
Newsweek, October 23, 2020

“We have 180 million people out there that have great private health care, far more than we’re talking about with Obamacare,” Trump said. “Joe Biden is going to terminate all of those policies.”

Biden immediately shot down Trump’s claim, asserting that the reason he secured the Democratic Party’s nomination was because “I support private insurance.”

“Not one single person with private insurance would lose their insurance under my plan, nor did they under Obamacare,” Biden said. “They did not lose their insurance, unless they chose they wanted to go to something else.”

https://www.newsweek.com…


Comment:

By Don McCanne, M.D.

In rejecting Medicare for All, President-elect Joe Biden says, “I support private insurance.” This GAO report is just one more factor that should make us question his wisdom on this topic.

The private insurance market is heavily concentrated and that concentration has increased with the implementation of the Affordable Care Act. As a representative of the American Hospital Association states, “highly concentrated insurance markets reduce patient choice, endanger patient care and increase their costs.” Further, “This allows health plans to adopt policies that benefit them financially and not patients. Such lack of competition encourages plans to pull a bait-and-switch on patients: delaying and denying medically necessary care that patients paid for through their premiums.”

Of course, single payer improved Medicare for All would ultimately concentrate health care financing into one single payer, but the difference would be that it would be our own payer, owned by the people, while returning to us the free choice that we want, the choice of health care professionals and hospitals that the private insurers take away from us.

The American Hospital Association understands the evil of concentrated health insurance markets, but they don’t seem to have much to say about the increasing market concentration of the hospital industry which we see has increased hospital prices.

Under single payer Medicare for All hospitals would be placed on global budgets, just like we do for fire departments. For those in the hospital industry who express concerns over global budgeting, maybe we should offer to nationalize the hospitals, creating our own national health service.

Regardless, we do have to get rid of the private insurance industry because they are out of control, and that harms too many of us.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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