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Private Health Insurance: Concentration of Enrollees among Individual, Small Group, and Large Group Insurers from 2010 through 2013

GAO-15-101R Published: Dec 01, 2014. Publicly Released: Dec 01, 2014.
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What GAO Found

The Patient Protection and Affordable Care Act (PPACA) requires GAO to study competition and market concentration in the health insurance market. For this study, we examined individual, small group, and large group health insurance markets prior to the implementation of key PPACA provisions that went into effect in 2014 and that could affect competition and market concentration among health insurers.

While several insurers participated in each state’s individual, small group, and large group health insurance markets in 2013, enrollment was concentrated among the three largest insurers in most states. In each of the three market segments, the three largest insurers had at least 80 percent of the total enrollment in at least 37 states. In more than half of these states, a single insurer had more than half of the total enrollees and in 5 of these states there was at least one market segment in which the largest insurer had at least 90 percent of all the enrollees. In the remaining states—12 states’ individual markets, 14 states’ small group markets, and 11 states’ large group markets—more insurers participated and the market segments were less concentrated, with enrollment spread out among more insurers.

The individual, small group, and large group health insurance markets in most states remained concentrated from 2010 through 2013. Specifically, for each of these market segments, there were at least 30 states for which the three largest insurers had at least 80 percent of the total enrollment in each of the 4 years. GAO also examined the companies that comprised the largest insurers in each state and found that, in addition to holding at least half of the enrollment in most states from 2010 through 2013, these same companies generally remained the top insurers during the time period.

Why GAO Did This Study

Millions of Americans obtain health coverage through private health plans, which include private health insurance sold in the individual, small group, and large group insurance market segments. Historically, there have been indications of high levels of concentration in these health insurance markets. A highly concentrated market—that is, one in which a small number of insurers enroll a significant portion of the total number of beneficiaries—may indicate a less competitive market and could affect consumers’ choice of health plans and their premiums.

In this study, GAO examined: (1) how enrollment in the individual, small group, and large group health insurance market segments in each state was distributed among insurers in 2013, and (2) how the concentration of insurers in these market segments in each state changed from 2010 through 2013. GAO analyzed 2010 data reported by insurance companies to the National Association of Insurance Commissioners (NAIC) and 2011 through 2013 data that PPACA requires insurers to report annually to the Department of Health and Human Services’ (HHS) Centers for Medicare & Medicaid Services (CMS), beginning in 2011. We analyzed each insurer’s share of total enrollment in each of the 50 states and the District of Columbia. For both the NAIC and CMS data, insurers submitted data separately for each market segment and state in which they conducted business. We did not assess the availability of insurers’ health plans, products, or policy offerings, as these data were not submitted by insurers to NAIC and CMS.


GAO is not making any recommendations. GAO provided HHS with a draft of this report for review; it indicated that it had no comments.

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BeneficiariesCompetitionFoundations (organizations)Health care servicesHealth insuranceInsurance companiesLoss ratioMedicaidMedicarePatient care servicesEmployee medical benefits