The American Medical Association has a new study out with some data about competition and concentration in the health insurance market. As summarized by healthcarepayernews.com:
- In 60 percent of the metropolitan statistical areas, the two largest insurers had a combined market share of 70 percent or greater.
- In 18 percent of the metropolitan statistical areas, at least one insurer had a market share of 70 percent or greater.
- In 24 states, the two largest insurers had a combined market share of 70 percent or more.
Free-market types say one way to get more competition would be by allowing insurance companies to compete across state lines, and that there are plenty of vigorously competitive markets in which the two largest players have 70% or more market share — Coke and Pepsi for colas, Microsoft and Apple for operating systems. If the insurance companies try to take advantage of their market share by charging monopoly prices, you'd expect that eventually new entrants would arise to compete at cheaper prices.
