Study Reveals Limited Competition in Medicare Advantage Market
For the study, researchers reviewed 2012 MA enrollment data in more than 2,900 counties.
The study found that about 97% of U.S. counties had "highly concentrated" MA markets, meaning that they had just a few plans available (Herman, Modern Healthcare, 8/25). According to the study, such counties represented 77% of total MA enrollment and 84% of all Medicare beneficiaries across the U.S. (Biles et al., Commonwealth Fund study, 8/25).
The lack of competition was greatest in rural areas, the study found (New York Times, 8/25). Meanwhile, the study also noted that just three insurers controlled the entire MA market in several areas, including Providence, R.I., and Ocean County, N.J. (Modern Healthcare, 8/25).
The study found that just one county -- Riverside, Calif. -- was deemed a competitive market (New York Times, 8/25).
In the 100 counties with the most Medicare beneficiaries, the dominant insurers included:
- Blue Cross-affiliated health plans;
- Humana; and
- UnitedHealth Group (Commonwealth Fund study, 8/25).
Stuart Guterman, co-author of the report and a former vice president at the Commonwealth Fund, said, "People are focusing on the potential for competition to be the answer to many of Medicare's challenges. But I'd be careful about using the concept of competition as some kind of magic bullet to address Medicare's problems. There isn't really competition" (Modern Healthcare, 8/25).
Competition Concerns Raised Amid Mergers
According to the Times, the findings come amid a wave of consolidation in the health insurance market (New York Times, 8/25).
For example, Aetna has announced it will acquire Humana, and Anthem is in the process of purchasing Cigna.
Guterman said such mergers do not "imply that competition is going to increase" and instead raise additional questions about "dwindling competition in many regional markets" (Modern Healthcare, 8/25).
According to the Times, insurance consolidation is likely to have a varying effect on consumers, depending on:
- Type of market; and
- Whether plans are sold to individuals, large employers or Medicare beneficiaries (New York Times, 8/25).