Private Health Insurance:

2008 Survey Results on Number and Market Share of Carriers in the Small Group Health Insurance Market

GAO-09-363R: Published: Feb 27, 2009. Publicly Released: Mar 24, 2009.

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As a follow-up to our 2005 and 2002 reports on the competitiveness of the small group health insurance market, Congress requested updated information on each state and the District of Columbia. Specifically, this report provides information from states and the District of Columbia (hereafter referred to as a state) on the number of carriers licensed in the small group market, the largest carriers, and their market share.

The median number of licensed carriers in the small group market per state was 27. The median market share of the largest carrier in the small group market was about 47 percent, with a range from about 21 percent in Arizona to about 96 percent in Alabama. In 31 of the 39 states supplying market share information, the top carrier had a market share of a third or more. The five largest carriers in the small group market, when combined, represented threequarters or more of the market in 34 of the 39 states supplying this information, and they represented 90 percent or more in 23 of these states. Thirty-six of the 44 states supplying information on the top carrier identified a Blue Cross and Blue Shield (BCBS) carrier as the largest carrier, and in all but 1 of the remaining 8 states, a BCBS carrier was among the five largest carriers. The median market share of all the BCBS carriers in the 38 states supplying this information was about 51 percent, with a range of less than 5 percent in Vermont and Wisconsin and more than 90 percent in Alabama and North Dakota. In comparing what states reported in 2008 to what they previously reported to GAO in 2005 and 2002, GAO found the median market share of the largest small group carrier has increased to about 47 percent in 2008 from the 43 percent reported in 2005 and the 33 percent reported in 2002. Twenty-four of the 29 states providing information in both 2002 and 2008 saw increases in the market share of the top carrier that ranged from about 2 to 39 percentage points. In contrast, the top carriers in 5 states lost market share with decreases ranging from about 1 to 16 percentage points. The number of states with a combined market share of the five largest carriers of 75 percent or more has also increased since our 2002 survey. The combined market share of the five largest small group carriers represented three-quarters or more of the market in 34 of 39 states, compared to 26 of 34 states reported in 2005 and 19 of 34 states reported in 2002. Finally, the median market share of all the BCBS carriers in 38 states reporting this information in 2008 was about 51 percent, compared to the 44 percent reported in 2005 and the 34 percent reported in 2002 for the 34 states supplying information in each of these years.

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