Abstract
With the establishment of state-based health insurance marketplaces, how U.S. health insurers are responding to market pressures and influencing premiums have represented important questions. We made novel use of the Standard and Poor’s (S&P) Financial, a Wall Street financial dataset platform, to analyze trends in market capitalization and total direct written premiums (DWPs) from 2001 to 2016 of the top 5, 10, and 25 health insurance companies. Our results indicate that the market concentration of publicly traded companies has remained relatively stable over the past decade. The top 5, 10, and 25 health insurance companies were 43.5%, 57.5%, and 78.6% of the total market share in 2001 and 39.4%, 52.9%, and 72.8% in 2016, respectively. DWPs have grown nearly four-fold from $177 billion to $631 billion at a compounded annual rate of 8.8%, consistent with overall healthcare sector growth. Aggregating state-specific data, the overall U.S. health insurance market has become slightly less consolidated over recent years, as measured using the population-weighted Herfindahl-Hirschman index, a measure for market concentration, falling from 3,817 to 2,174 during this time period. As health insurance costs place a growing burden on American families, additional efforts are needed to study the impact on choice, quality, access, cost, and value to patients and providers from evolving health insurance markets.
Highlights
Changes in the health insurance market can profoundly affect patients, payers, and providers [1,2,3]
Our results indicate that the market concentration of publicly traded companies has remained relatively stable over the past decade
With the passage of the Affordable Care Act (ACA) and the establishment of statebased health insurance marketplaces (HIMs) [7], how health insurers are responding to market pressures and influencing premiums have represented important questions in the U.S healthcare sector
Summary
Changes in the health insurance market can profoundly affect patients, payers, and providers [1,2,3]. With the passage of the Affordable Care Act (ACA) and the establishment of statebased health insurance marketplaces (HIMs) [7], how health insurers are responding to market pressures and influencing premiums have represented important questions in the U.S healthcare sector. These issues are, challenging to examine on a national scale, in part due to the difficulty in obtaining comprehensive data for the multitude of insurers that exist [5,6]. Citing calls by policymakers for additional evidence, a recent study found that 57% of U.S metropolitan statistical areas were highly concentrated for insurers in 2016, with mean measures of market concentration declining by 1% between 2011 and 2016 [8]
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