Pauly says the best solution would be to break up the monopolies, but that probably isn't going to happen. "The next solution, which is probably where we are more likely to go, is to control or regulate the monopoly," he says. "The rules in the Affordable Care Act about minimum medical loss ratios are an attempt to get insurer profits and excess profits down by regulation. Medicare is big enough that it can push doctors and hospitals around, and the hope is that these new health insurance exchanges will somehow convert a whole bunch of insurance midgets into a giant that will somehow be able to deal more effectively with healthcare providers."
The AMA study found:
- A significant absence of health insurer competition in 70% of the metropolitan areas it studied. These markets are rated "highly concentrated," based on the 2010 Horizontal Merger Guidelines issued by the U.S. Department of Justice and Federal Trade Commission.
- In 67% of the metropolitan areas studied, at least one health insurer had an HMO market share of 50% or greater.
- In 68% of the metropolitan areas, at least one health insurer had a PPO market share of 50% or greater.
- In 68% of the metropolitan areas, at least one health insurer had a POS market share of 50% or greater.
- The top 10 states with the least competitive commercial health insurance markets are (in order): Alabama, Hawaii, Michigan, Delaware Alaska, North Dakota, South Carolina, Rhode Island, Wyoming, and Nebraska.