Multiple companies may sell health insurance in a given market, but only a small number of these insurers will have the most enrollees, as we previously reported.  Known as market concentration, this can leave enrollees with fewer choices of insurers and higher premiums because of less competition in the market.  Market concentration generally increased from 2011 through 2024, with three or fewer insurers holding at least 80% market share for the individual and employer group markets in at least 36 states.  However, concentration in the markets for individuals peaked in 2019 and has become slightly less concentrated since.

What GAO Found

Since 2014, GAO has reported that enrollment in private health insurance plans has been concentrated, meaning a small number of issuers, such as health insurers, enrolled most of the people in a given market.  Specifically, GAO considers a market concentrated in a state if three or fewer issuers hold at least 80 percent of the market share of enrollment.  For this report, GAO examined the individual (coverage primarily sold to individuals who lack access to group coverage), small-group (coverage offered by small employers), and large-group (coverage offered by large employers) health insurance markets from 2011 through 2024 across states.  GAO found that the number of states with concentrated markets generally increased, with recent decreases in the individual market (see figure).

Number of States, Including the District of Columbia, Where the Three Largest Issuers Had at Least 80 Percent of Enrollment, 2011 Through 2024

Note: The most recent years in GAO’s series on market concentration, 2023 and 2024, are highlighted in this figure.

GAO also examined concentration across the individual insurance exchanges, which are part of the overall individual market.  Individual exchanges, which are marketplaces where consumers can compare and select among insurance plans offered by participating issuers, were established by the Patient Protection and Affordable Care Act (PPACA).  Similar to the overall individual insurance market, the individual exchanges became more concentrated from 2015 through 2020 and then generally less concentrated through 2024.  The number of states where the individual exchanges were concentrated increased from 47 states in 2015 to a peak of 51 states in 2020 and then decreased to 49 states in 2024.

Why GAO Did This Study

Private health insurance is the most common source of health insurance coverage in the United States.  Individuals have various options for obtaining private health insurance, including through the individual, small-group, and large-group markets.  A concentrated health insurance market may indicate less issuer competition and could affect consumers’ choices of issuers and the premiums they pay for insurance.  PPACA includes a provision for GAO to periodically study health insurance market concentration.  This report, the seventh in this series, describes changes in the concentration of enrollment among issuers in the overall individual, small-group, and large-group health insurance markets and in the individual insurance exchanges.  GAO determined market share in each of the three overall markets and the individual insurance exchanges using enrollment data from 2011 through 2024 that issuers report to the Centers for Medicare & Medicaid Services and enrollment data that GAO collected from individual states from 2015 to 2017.  GAO used the most recent two years of data available at the time of its review and presented this information alongside its prior analyses beginning in 2011.  GAO provided a draft of this report to the Department of Health and Human Services.  The department provided technical comments that we incorporated as appropriate.

Full Report