Little competition exists among health insurance companies, AMA study says Posted: February 9th, 2011

Commercial health insurance customers have few choices when it comes time to shop for a health plan. That's according to a recent study published by the American Medical Association (AMA), which reveals little competition among health insurers in most U.S. markets.

The AMA study discovered that 99 percent of health insurance markets in the U.S. meet the U.S. Department of Justice and Federal Trade Commission definition of "highly concentrated," which means a significant absence of competition. In 48 percent of the country's metropolitan statistical areas, one health insurance company held a market share of 50 percent or more, the AMA study said.

"The market power of health insurers continues to prompt anti-competitive concerns among physicians," said AMA President Dr. Cecil B. Wilson in a statement. The association encourages state and federal agencies to prohibit health insurance company mergers that could further reduce competition.

The AMA called for policies that level the playing field between small physician practices and large health insurance companies as a way to compensate for non-competitive health insurance markets. Said Dr. Wilson, "when insurers dominate a market, people pay higher health insurance premiums than they should, and physicians are pressured to accept unfair contract terms and corporate policies, which undermines the physician('s) role as patient advocate."