AMA: Alabama has the least competitive health insurance market in ...

Alabama is No. 1.

But in this category -- the least competitive commercial health insurance market -- that's not a good thing --at least for patients and doctors, according to a report released today by the American Medical Association.

A study of U.S. markets found that a single insurer -- Blue Cross Blue Shield of Alabama -- accounts for 88 percent of Alabama's commercial health insurance market.

Broken out into markets for specific managed care plans, Alabama rated first among states with the least competitive PPO (preferred provider organization) markets; second among states with the least competitive HMO (health maintenance organization) markets; and fourth among states with the least competitive POS (point of service) markets.

The AMA? study found near monopolies in several geographical areas in Alabama.

In the overall commercial health insurance market, Blue Cross Blue Shield? has a market share of 94 percent in Gadsden.

In the HMO market, Viva Health accounts for 95 percent or more of the markets in Birmingham, Mobile and Montgomery.

In the PPO? market, Blue Cross Blue Shield accounts for 95 percent or more of the markets in Auburn, Birmingham, Decatur, Dothan, Florence, Gadsden, Huntsville, Montgomery and Tuscaloosa.

According to the study, this anti-competitive environment hurts patients and doctors because of higher premiums, watered-down benefits and insurers' growing profitability.

"It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power," according to the study.

Blue Cross Blue Shield spokeswoman Koko Mackin said in an email that Alabama had the second lowest average family premiums in the country among employers, according to the 2011 Medical Expenditure Panel Survey.

"Blue Cross' profit margins for the last 5 years have averaged less than one cent on the dollar, reflecting our goal of delivering value to our customers," said Mackin, vice president of Corporate Communications and Community Relations. "We return over 90 cents in healthcare benefits for every dollar received from our customers, and our 7 percent admin expense ratio is one of the lowest in the country and second among the 38 Blue Cross Blue Shield Plans."

An insurance industry group quickly blasted the AMA study.

America's Health Insurance Plans (AHIP) in a written statement said the "fatally flawed" study has been debunked by economists.

"Families and employers in every state have multiple choices of both insurance plans and types of coverage," according to the statement from spokesman Robert Zirkelbach. " Moreover, research clearly demonstrates that provider consolidation - not concentration of health plan markets - is driving up health care costs for consumers and employers."

According to the AMA study, the top 10 states with the least competitive commercial health insurance markets are: 1. Alabama, 2. Hawaii, 3. Michigan, 4. Delaware 5. Alaska, 6. North Dakota, 7. South Carolina, 8. Rhode Island, 9. Wyoming and 10. Nebraska.

Source: http://blog.al.com/spotnews/2012/11/ama_alabama_has_the_least_comp.html

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