For Many Consumers, Few Insurance Choices - Prescriptions Blog - NYTimes.com

For Many Consumers, Few Insurance Choices - Prescriptions Blog - NYTimes.com

According to statistics from the American Medical Association, the leading insurance provider in California covers 24 percent of the population, while in New York the figure is 26 percent and in Florida, 30 percent.

But there are nine states where a single insurer covers 70 percent or more of the people. In Hawaii, one insurer covers 78 percent. In Alabama, it’s 83 percent. And in at least 17 other states one insurer covers at least half the population.

Some members of the Senate Finance Committee, which is taking a lead on health care legislation, come from states where the insurance market is highly concentrated. The Democratic chairman, Senator Max Baucus, is from Montana, where 75 percent of people are covered by one major insurer, Blue Cross Blue Shield of Montana. For Senator Charles E. Grassley, Republican of Iowa, the figure is 71 percent, by Wellmark. For Senator Olympia Snowe, Republican of Maine, it’s 78 percent, by WellPoint.

“For many Americans, the idea that they have a choice of health plans is about as mythical as unicorns,” said Jacob Hacker, professor of political science at Yale University.

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As critics see it, part of the problem is consolidation in the insurance industry. According to the American Medical Association, there have been 400 corporate mergers among insurance providers in the last dozen years. WellPoint alone covers 34.2 million people, according to the company’s second-quarter earnings report. UnitedHealth Group covers 29.5 million, according to its second-quarter statement.

“The largest seven insurers cover more than 100 million people, a third of the market,” said Mr. Potter, who bases his figures on federal securities filings. ...
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Would non-profit coops provide meaningful competition?

Mr. Potter, the former CIGNA officer, is skeptical.

“Philadelphia, my hometown, is dominated by Independence Blue Cross and Aetna,” he said. As it happens, that’s where CIGNA has its headquarters. “But CIGNA has a small presence there,” he said. “The market is largely locked up by the dominant companies.” ...