Texas’ Commercial Health Insurance Market Growing Less Competitive

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Texas’ commercial health insurance market is growing less competitive, a new study shows.

Blue Cross Blue Shield of Texas is the dominant player in 25 of 26 Texas metropolitan areas, said a report issued Thursday by the doctors’ group the American Medical Association.

All of Texas’ 26 metro markets except three — Temple, Waco and Houston — are “highly concentrated” when it comes to health insurance, said the study, using an index devised by trust-busters at the U.S. Department of Justice and Federal Trade Commission to gauge marketplace competition.

The AMA study said Texas’ largest health insurers are Health Care Service Corp, Chicago-based parent company of Blue Cross Blue Shield of Texas, and Minneapolis-based UnitedHealth Group. Together, the two companies controlled 63 percent of the state’s commercial health insurance market in 2012, compared with 57 percent in 2010, it found.

Both statewide and in the Dallas-Plano-Irving metropolitan statistical area, Blue Cross increased its market share between 2010 and 2012. Meanwhile, UnitedHealth overtook Aetna for second place in Dallas and statewide.

Here are the Dallas numbers:

2010: Blue Cross 29 percent; Aetna 25 percent
2012: Blue Cross 35 percent; UnitedHealth 28 percent

In the Fort Worth-Arlington MSA, Blue Cross and UnitedHealth in 2012 surged ahead of Aetna. In 2010, Aetna had led the Cowtown market, with a 26 percent share, compared with Blue Cross’ 24 percent.

In Wichita Falls, the most concentrated Texas market, Blue Cross had 71 percent of the business in 2012, the study found.

Nationwide, the economists who wrote the report for the doctors’ group decried the fact that 72 percent of the 388 markets studied are highly concentrated.

“These markets are ripe for the exercise of health insurer market power, which harms consumers and providers,” it said.

While the AMA’s press release stressed that Indianapolis-based WellPoint Inc. dominates 82 of the markets studied, Health Care Service Corp., the parent of Texas’ Blue Cross plans, has the second-biggest “geographic footprint.”

HCSC leads in market share in 37 metro areas, including Chicago and six more of Illinois’ 11 markets; half of New Mexico’s four markets; and all three in Oklahoma.

Texas Blue Cross spokeswoman Margaret Jarvis said the insurer thrives despite “strong local and national competition” because of its range of products, expansive provider networks and good service to and guidance of customers.

HCSC “supports a competitive marketplace for health insurance,” she said. “Recent studies suggest our strong membership actually helps bring down the cost of medical care in the communities we serve, whereas consolidation of providers in a market is found to increase costs for consumers.”

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