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 on November 7, 2005. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. 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: ² 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. ² 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. ² 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. ² 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. ² 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. ² 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.