A new report showing the growing influence of health plans in markets across the country has doctors worried, particularly as the federal government is handing off more business to the commercial insurance industry thanks to the Affordable Care Act.
But the bigger "footprint" of health plans might not be bad for investors or patients, according to the insurance industry.
The American Medical Association study shows what it says is an "absence of health insurer competition" in 72% of U.S. metropolitan areas. The AMA isn't saying the health plans are violating antitrust laws, but the nation's largest doctor group wants antitrust regulators to keep its report in mind.
"The AMA is greatly concerned that in 41 percent of metropolitan areas, a single health insurer had at least 50 percent share of the commercial insurance market," AMA President Robert Wah said in a statement accompanying the report, "Competition in Health Insurance: A Comprehensive Study of U.S. Markets."
The study, which is based on 2012 data from commercial insurance enrollment in both fully insured plans and self-insured plans, also showed 17 states had a single insurer with a commercial market share of 50% or more and 45 states had two health insurers with a combined market share of 50% or more, the AMA said.
Health insurance companies and employers that hire them to administer self-funded plans hold significant power over patient choices for medical care providers. Given that benefits provided under the health law, as well as the expanded Medicaid program for poor Americans, are largely administered by commercial plans, the insurance industry's clout is only expected to increase.
Doctors worry that insurance companies' increasing influence is squeezing patient choice of their services through an escalated use of narrow networks and other methods that can pare doctor lists.
"The dominant market power of big health insurers increases the risk of anti-competitive behavior that harms patients and physicians and behavior that harms patients and physicians and presents a significant barrier to the market success of small insurance rivals," Wah said.
The AMA said insurer WellPoint had the "biggest footprint," with the largest market share in 82 of 388 metropolitan areas studied where it operates its Anthem and Blue Cross plans. Health Care Service, a mutual plan that also operates Blue Cross and Blue Shield plans in Illinois, Texas, and three other states, was second with a market share lead in 37 metropolitan areas, followed by UnitedHealth Group with a market share advantage in 35 states.
Insurance companies took the AMA report in stride, saying the findings have been been done before and ignore the impact of medical-care provider consolidation on costs. Insurance companies also usually claim that the larger pools of patients allow them to better manage risks and keep costs more affordable, particularly as they offer more plans on Obamacare exchanges.
Insurers also point to the federal government's announcement recently that there has been a more than 20% increase in health plan participation on state and federally regulated exchanges under the ACA for 2015 (compared to 2014). This, health plans say, increases consumer insurance choice for the uninsured and others taking to the exchanges.
"Consumers have wide range of choices when it comes to their coverage, and in fact, the federal government reports that consumers will have even more options this year," said Clare Krusing, a spokeswoman for America's Health Insurance Plans, the Washington lobby that represents UnitedHealth, Aetna, Cigna, and myriad Blue Cross and Blue Shield plans.
The federal government said there will be more competition on exchanges next month when the second open enrollment period begins under the Affordable Care Act.
WellPoint, also responding to the AMA study, said through spokeswoman Jill Becher that "consumers are attracted to our health plans because of our trusted brand name and our record of providing affordable access to quality health care for 75 years or more in some of our markets."
Insurers say use of narrow network strategies, which keep quality doctors on their lists and weed out bad apples, has escalated as health plans offer more products on exchanges to keep them affordable. Insurers are also moving away from fee-for-service medicine that pays doctors for each and every procedure no matter how the care turns out, toward more accountable arrangements that encourage wellness and care coordination, making reimbursement to providers based on quality rather than volume.
"Consumers value the large provider networks we offer and our industry-leading benefits at prices they can afford," WellPoint's Becher said. "In this new era of health care, we believe greater collaboration with the provider community is essential to fundamentally improving health care quality and affordability. That's why we're involved in accountable care organizations and other innovative arrangements with providers in many of our markets across the country."
