AMA releases new marketplace study - Wellmark remains dominant

Posted July 10, 2007

The AMA's report, Competition in Health Insurance - A Comprehensive Study of U. S. Markets (2007), shows Wellmark's continued growth in dominating the Iowa PPO/HMO marketplace dominance, particularly in the PPO market.

The 2007 report utilizes January 2005 data and, as in the past, references the federal antitrust HHI (Herfindahl-Hirschman Index) measure of marketplace concentration to assess competition or lack thereof in our nation's health insurance industry. An HHI score exceeding 1800 indicates a highly concentrated market. Iowa statewide data shows the following:

PPO/HMO Market	PPO Market	HMO Market
HHI = 5170	HHI = 6133	HHI = 3394
Dominant insurer:	Dominant insurer:	Dominant insurer:
Wellmark (71%)	Wellmark: 78%	Wellmark: 49%

Iowa's HHI score for the state's PPO/HMO market in the 2005 report was 3898 and Wellmark's dominance at that time was 60%. The 2007 report also includes HHI scoring information for seven Iowa metropolitan statistical areas (MSAs): Ames, Cedar Rapids, Davenport-Moline-Rock Island, Des Moines, Iowa City, Sioux City, and Waterloo-Cedar Falls (see link below).

The AMA study helps to identify problem markets where competition is diminished, to prompt discussion about the long-term impact of consolidated health insurance markets, and to find solutions. The majority of the nation's MSAs are dominated by a single health insurer. Large health insurers are getting bigger. In 2000, the two largest insurers, Aetna and United, had a combined membership of 32 million lives; at the time of this report, the two top insurers were Wellpoint covering 34 million lives and United covering 33 million lives, together controlling 36% of the national health insurance market.

Click here to access Iowa statewide and MSA data findings. Click here to view a chart summary of Iowa statewide comparative data for each of the six reports (2001-2007). Click here to access the AMA's 2007 report.

AMA Antitrust link