By: Max Niesen
08/26/2015
qz.com
With two major health insurance mergers pending, the US may be headed for a healthcare market with only three major private health insurers, down from the five that exist now.
Critics argue that the pending mergers of Anthem with Cigna and Aetna with Humana will further reduce competition. But when it comes to private Medicare plans— the national social insurance called Medicare Advantage (MA) that uses private health insurers—the lack of competition is already awful. Ninety-seven percent of American counties have little or no plan competition, according to a new reportby The Commonwealth Fund, a US healthcare research foundation.
Many of the counties are sparsely populated rural areas. But even within the 100 largest counties by number of Medicare beneficiaries, 81% aren’t competitive, according to the report. Seventy-seven percent of seniors enrolled in MA live in noncompetitive counties.
The report measured competitiveness based on the Herfindahl-Hirschman Index, which classifies markets as non-concentrated, moderately concentrated, or highly concentrated based on the the number of firms within the area and their market share. The Federal Trade Commission uses the index to classify markets for antitrust purposes.