Health care experts are warning that costs for insurance will likely rise again in 2025.
One trend that may be contributing to higher insurance costs is the growing market concentration among fewer insurance companies.
We recently looked at changes in private health insurance market concentration. We also compared costs under two types of private health plans—employer-sponsored plans and individual plans offered on the Healthcare.gov Marketplace.
Today’s WatchBlog post looks at what we found and reported in two new reports about these trends.
Private insurance is getting more concentrated, which could raise prices of health coverage
Over the last decade or so, the number of private health insurance companies in each state has decreased. And in many states, just a few companies may insure most private policy holders. Concentrated markets are concerning. As markets become more concentrated, they may also become less competitive. This may result in higher premiums, decreased access to affordable health insurance, and fewer options for consumers.
We consider a state’s market to be concentrated when three or fewer insurance companies hold at least 80% of the market share of enrollment. This concentration has been seen in many states for years.
In our November report, we looked to see if concentration trends were true across different private insurance markets—the individual market, and markets for small and large employers. We found that all three markets have become more concentrated.
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