Health insurance markets have become increasingly consolidated, according to a study released by the American Medical Association (AMA), with more metropolitan areas meeting the federal definition of a “highly concentrated” market and more insurers attaining a 50 percent market share.

Of the 368 metro areas examined by the study, 169 (43 percent) had a single insurer controlling at least half the commercial health insurance market, up from 156 metro areas (40 percent) in the 2014 study. In 89 percent of metro areas, at least one insurer had a market share of 30 percent or greater. Some 69 percent of metro areas fit the definition of a “highly concentrated” market set by the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC).

“Both consummated and proposed consolidation of health insurers should raise serious antitrust concerns,” the report said. “Conceptually, mergers and acquisitions can have beneficial and harmful effects on consumers. However, only the latter has been observed. It appears that consolidation has resulted in the possession and exercise of health insurer monopoly power—the ability to raise and maintain premiums above competitive levels—instead of the passing of any benefits obtained through to consumers.”

That argument was used in the successful efforts to block the proposed Anthem-Cigna and Aetna-Humana mergers, both of which were opposed by the AMA.

The consolidation trends appeared higher when breaking down the metro areas by plan design. Of the 266 areas which reported data on health maintenance organizations (HMOs), 193 (73 percent) had one insurer with at least a 50 percent share of the HMO market. For the preferred provider organization (PPO) product market, 227 of the 389 metro areas (58 percent) had a single insurer with at least half the market share.

The market for point-of-service (POS) plans was the most consolidated, with all of the 333 POS markets meeting the federal definition for being highly concentrated. 91 percent (303 metro areas) had one insurer with a 50 percent or greater market share and 60 percent (202 metro areas) had an insurer controlling at least 70 percent of the POS market.

Broken down state-by-state, the study said the five states with the least competitive commercial health insurance markets were:

1. Alabama (Blue Cross Blue Shield of Alabama has 83 percent market share)
2. Delaware (Highmark has 68 percent market share)
3. Hawaii (Hawaii Medical Service Association/BCBS of Hawaii has 68 percent market share)
4. South Carolina (BCBS of South Carolina has 67 percent market share)
5. Louisiana (Louisiana Health Service & Indemnity Company/BCBS of Louisiana has 67 percent market share)

Anthem, the largest of the Blue Cross Blue Shield companies, has the biggest geographic footprint in the areas examined by the AMA. It was the largest health insurer by market share in 92 of the 389 metro areas. Health Care Service Corporation, which is the BCBS licensee in Illinois, Montana, New Mexico, Oklahoma and Texas, has the highest market share in 42 metro areas.

The conclusion of the report is even with several major mergers between insurers being blocked, health insurance consolidation has continued, with 27 states becoming more concentrated between 2014 and 2016.

“These markets are ripe for the exercise of health insurer market power, which harms consumers and providers of care,” the report said. “Our findings should prompt federal and state antitrust authorities to vigorously examine the competitive effects of proposed mergers between health insurers.”