10 States with the Least Insurer Competition

On a macroeconomic level, America's health insurance market appears to include a wide range of health insurer choices. However, a new study by the American Medical Association shows that doesn't translate into local competition.

On a macroeconomic level, America’s health insurance market appears to include a wide range of health insurer choices. However, a new study by the American Medical Association shows that doesn’t translate into local competition.

In fact, a single insurer has more than 50% market share in 17 states, according to AMA. Forty-five states have more than half of their market controlled by just two companies. And in 72% of metropolitan areas studied, the association found an “absence of health insurer competition.”

“The dominant market power of big health insurers increases the risk of anti-competitive behavior and harms patients and physicians and presents a significant barrier to the market success of smaller insurance rivals,” said Robert M. Wah, MD, the association’s president.

WellPoint Inc. was singled out as having the largest geographic footprint, with a commanding market position in more than 20% of US metropolitan areas. WellPoint will soon be renamed Anthem Inc.

The data are as of Jan. 1, 2012 and are based on commercial enrollment in fully and self-insured plans.

AMA used its data and a metric called the Herfindahl-Hirschman Indices (HHI) to gauge market concentration and competition across the US.

Oregon, Wisconsin, and Pennsylvania were found to have the healthiest competition. What follows is the 10 states with the least competitive health insurance markets, starting with the 10th-least competitive and finishing with the least competitive.

10. North Dakota

Top Insurer: Blue Cross Blue Shield of North Dakota (55% market share)

Second-largest Insurer: Aetna (24% market share)

9. Nebraska

Top Insurer: Blue Cross Blue Shield of Nebraska (56%)

Second-largest Insurer: United Healthcare (21%)

8. Illinois

Top Insurer: Heath Care Services Corp./Blue Cross Blue Shield (61%)

Second-largest Insurer: United Healthcare (14%)

7. Alaska

Top Insurer: Premera Blue Cross (59%)

Second-largest Insurer: Aetna (22%)

6. South Carolina

Top Insurer: Blue Cross Blue Shield of South Carolina (61%)

Second-largest Insurer: United Healthcare (16%)

5. Louisiana

Top Insurer: Louisiana Health Services and Indemnity Co. (62%)

Second-largest Insurer: United Healthcare (16%)

4. Delaware

Top Insurer: Blue Cross Blue Shield of Delaware (62%)

Second-largest Insurer: Aetna (20%)

3. Michigan

Top Insurer: Blue Cross Blue Shield of Michigan (67%)

Second-largest Insurer: Spectrum Health (9%)

2. Hawaii

Top Insurer: Hawaii Medical Services Association/Blue Cross Blue Shield (65%)

Second-largest Insurer: Kaiser Permanente (21%)

1. Alabama

Top Insurer: Blue Cross Blue Shield of Alabama (84%)

Second-largest Insurer: United Healthcare (7%)