A new study by the American Medical Association says health insurance rates are rising because of a lack of competition among health insurers.
In 95 percent of markets, a single insurer had a market share of 30 percent or greater, and in 56 percent of the markets, a single insurer had a 50 percent or larger market share, according to the study.
In the greater Baltimore area, two health insurance carriers dominate. CareFirst BlueCross BlueShield controls 49 percent of the market, while Minneapolis-based UnitedHealth Group has a 21 percent share.
AMA?s study contends that such market dominance by a few companies is not good for consumers.
“Health insurers are posting historically high profit margins, yet patients? health insurance premiums continue to rise without an expansion of benefits,” AMA Board Member J. James Rohack, M.D., said in a statement.
CareFirst is a nonprofit, but publicly traded UnitedHealth is showing record profits, and its chief executive officer, William W. McGuire, M.D., predicts more of the same. “We expect those earnings [2006] to be well supported by cash flows from operations in a range of $5.7 billion to $5.9 billion, an increase of $1.4 billion to $1.6 billion over the comparable 2005 result and well in excess of our estimated net income of approximately $4.1 billion,” McGuire said Tuesday in a written statement.
America?s Health Insurance Plans, a Washington-based association for 1,300 health insurers, strongly disagrees with the study.
“We have looked at all the available studies on health care from the government and others,” said Susan Pisano, a spokeswoman for the association.
“It?s new technology and more use of hospitals that are fueling increasing health care premiums, not a lack of competition.”
In its study, the AMA blamed higher premiums on the 400 mergers involving health insurers and managed care organizations over the past five years.
