This is the accessible text file for GAO report number GAO-06-155R 
entitled 'Private Health Insurance: Number and Market Share of Carriers 
in the Small Group Health Insurance Market in 2004' which was released 
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October 13, 2005: 

The Honorable Olympia J. Snowe: 
Chair: 
Committee on Small Business and Entrepreneurship: 
United States Senate: 

The Honorable Christopher "Kit" Bond: 
United States Senate: 

The Honorable James M. Talent: 
United States Senate: 

Subject: Private Health Insurance: Number and Market Share of Carriers 
in the Small Group Health Insurance Market in 2004: 

As a follow-up to our 2002 report on the competitiveness of the small 
group health insurance market,[Footnote 1] you requested updated 
information on each state and the District of Columbia. Specifically, 
you asked us to identify--for each state--the number of 
carriers[Footnote 2] licensed in the small group market, the largest 
carriers, and their market share. 

To obtain this information, we sent an electronic survey to the office 
responsible for regulating insurance, health plans, or both in all 50 
states and the District of Columbia (hereafter referred to as a state). 
We followed up with nonresponding states by e-mail and by telephone and 
received responses from 47 states. However, not all 47 states had the 
information needed to answer all of the questions. For example, 40 
states reported the largest carrier and 34 states provided market share 
data. Also, the responding states varied in how they defined the size 
of a small group. Most--35--defined a small group as 2 to 50 employees, 
10 defined a small group as 1 to 50 employees, and 1 had another 
definition.[Footnote 3] We did not verify the information provided by 
the states. We performed our work from August through October 2005 in 
accordance with generally accepted government auditing standards. 

The following summarizes our findings: 

 The median number of licensed carriers in the small group market per 
state was 28, with a range from 3 in Rhode Island to 75 in Georgia. 

 The median market share of the largest carrier in the small group 
market was about 43 percent, with a range from about 19 percent in 
Texas to about 93 percent in North Dakota. 

 The five largest carriers in the small group market, when combined, 
represented three-quarters or more of the market in 26 of the 34 states 
supplying information, and they represented 90 percent or more in 12 of 
these states. 

 Thirty of the 40 states supplying information identified a Blue Cross 
and Blue Shield (BCBS) carrier as the largest carrier offering health 
insurance in the small group market, and in all but 1 of the remaining 
10 states, a BCBS carrier was among the five largest carriers. 

 The median market share of all the BCBS carriers in the 34 states 
supplying information was about 44 percent, with a range from about 6 
percent in Wisconsin to about 93 percent in North Dakota; in 13 of 
these states BCBS carriers combined for half or more of the market. 

 The market share of the largest small group carrier has increased 
since our 2002 report. The median market share of the largest small 
group carrier was about 43 percent, compared to the 33 percent reported 
in 2002. The combined market share of the five largest small group 
carriers represented three-quarters or more of the market in 26 of 34 
states, compared to 19 of 34 states reported in 2002. Finally, the 
median market share of all the BCBS carriers in 34 reporting states was 
about 44 percent, compared to the 34 percent reported in 2002. 

The enclosure summarizes by state the number of licensed carriers, the 
largest carrier and its market share, and the market share of the five 
largest carriers in the small group market. In addition, the enclosure 
shows the rank of the largest BCBS carrier and the combined market 
share of all BCBS carriers. 

As arranged with your offices, unless you publicly announce the 
contents of this report earlier, we plan no further distribution of it 
until 30 days after its issue date. Copies will then be made available 
upon request. In addition, the report will be available at no charge on 
the GAO Web site at http://www.gao.gov. Contact points for our Offices 
of Congressional Relations and Public Affairs may be found on the last 
page of this report. Please call me at (202) 512-7119 if you have any 
questions. Major contributors to this report were Randy DiRosa, 
Assistant Director; Iola D'Souza, and M. Peter Juang. 

Signed by: 

John E. Dicken: 

Director, Health Care: 

Enclosure: 

Number of Carriers, Largest Carrier, and Market Share Data for Small 
Group Health Insurance Carriers by State: 

[See PDF for image] 

Source: GAO survey of state insurance regulators. 

Legend: NA = not available. 

Notes: Reported data are for December 2004 unless otherwise noted. 

Ranking and market share data are based on the number of covered lives 
unless otherwise noted. 

Four states did not respond to the survey: California, New Hampshire, 
New Mexico, and Pennsylvania. In addition, six states did not provide 
data on small group carriers or on market share: Arkansas, Hawaii, 
Indiana, Mississippi, Nebraska, and South Dakota. 

[A] The Alabama Department of Insurance estimated that BCBS of Alabama 
represented about 75 to 80 percent of the small group market. Seventy- 
eight percent represents the rounded midpoint of that range. 

[B] Data are for December 2003. 

[C] Georgia reported that there are no standard reporting sources on 
the number of carriers and the total number of covered lives in the 
small group market, but estimated the number of carriers at about 75, 
and estimated the total number of covered lives to be 851,365. We used 
the estimated number of covered lives to calculate rankings and market 
share. 

[D] Ranking and market share are based on gross premiums. 

[E] Data are for January 2005. 

[F] Total premium data or number of covered lives are not collected for 
the small group market. A Virginia Bureau of Insurance official 
reported that Anthem BCBS was clearly the largest carrier in the small 
group market. 

[End of table] 

(290490): 

FOOTNOTES 

[1] GAO, Private Health Insurance: Number and Market Share of Carriers 
in the Small Group Health Insurance Market, GAO-02-536R (Washington, 
D.C. Mar. 25, 2002). 

[2] A carrier is generally an entity (either an insurer or managed 
health care plan) that bears the risk for and administers a range of 
health benefit offerings. 

[3] Missouri defined small group as from 3 to 25 employees.