Private Health Insurance: Number and Market Share of Carriers in
the Small Group Health Insurance Market in 2004 (13-OCT-05,
GAO-06-155R).
As a follow-up to our 2002 report on the competitiveness of the
small group health insurance market, Congress requested updated
information on each state and the District of Columbia.
Specifically, Congress asked us to identify--for each state--the
number of carriers licensed in the small group market, the
largest carriers, and their market share.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-155R
ACCNO: A39478
TITLE: Private Health Insurance: Number and Market Share of
Carriers in the Small Group Health Insurance Market in 2004
DATE: 10/13/2005
SUBJECT: Employee medical benefits
Health insurance
Health insurance cost control
Small business
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GAO-06-155R
United States Government Accountability Office Washington, DC 20548
October 13, 2005
The Honorable Olympia J. Snowe
Chair
Committee on Small Business and Entrepreneurship
United States Senate
The Honorable Christopher "Kit" Bond
United States Senate
The Honorable James M. Talent
United States Senate
Subject: Private Health Insurance: Number and Market Share of Carriers in
the Small Group Health Insurance Market in 2004
As a follow-up to our 2002 report on the competitiveness of the small
group health insurance market,1 you requested updated information on each
state and the District of Columbia. Specifically, you asked us to
identify-for each state-the number of carriers2 licensed in the small
group market, the largest carriers, and their market share.
To obtain this information, we sent an electronic survey to the office
responsible for regulating insurance, health plans, or both in all 50
states and the District of Columbia (hereafter referred to as a state). We
followed up with nonresponding states by e-mail and by telephone and
received responses from 47 states. However, not all 47 states had the
information needed to answer all of the questions. For example, 40 states
reported the largest carrier and 34 states provided market share data.
Also, the responding states varied in how they defined the size of a small
group. Most-35- defined a small group as 2 to 50 employees, 10 defined a
small group as 1 to 50 employees, and 1 had another definition.3 We did
not verify the information provided by the states. We performed our work
from August through October 2005 in accordance with generally accepted
government auditing standards.
The following summarizes our findings:
o The median number of licensed carriers in the small group market per
state was 28, with a range from 3 in Rhode Island to 75 in Georgia.
1 GAO, Private Health Insurance: Number and Market Share of Carriers in
the Small Group Health
Insurance Market, GAO-02-536R (Washington, D.C.: Mar. 25, 2002).
2 A carrier is generally an entity (either an insurer or managed health
care plan) that bears the risk for
and administers a range of health benefit offerings.
3 Missouri defined small group as from 3 to 25 employees.
GAO-06-155R State Small Group Insurance Markets
o The median market share of the largest carrier in the small group
market was about 43 percent, with a range from about 19 percent in Texas
to about 93 percent in North Dakota.
o The five largest carriers in the small group market, when combined,
represented three-quarters or more of the market in 26 of the 34 states
supplying information, and they represented 90 percent or more in 12 of
these states.
o Thirty of the 40 states supplying information identified a Blue Cross
and Blue Shield (BCBS) carrier as the largest carrier offering health
insurance in the small group market, and in all but 1 of the remaining 10
states, a BCBS carrier was among the five largest carriers.
o The median market share of all the BCBS carriers in the 34 states
supplying information was about 44 percent, with a range from about 6
percent in Wisconsin to about 93 percent in North Dakota; in 13 of these
states BCBS carriers combined for half or more of the market.
o The market share of the largest small group carrier has increased
since our 2002 report. The median market share of the largest small group
carrier was about 43 percent, compared to the 33 percent reported in 2002.
The combined market share of the five largest small group carriers
represented three-quarters or more of the market in 26 of 34 states,
compared to 19 of 34 states reported in 2002. Finally, the median market
share of all the BCBS carriers in 34 reporting states was about 44
percent, compared to the 34 percent reported in 2002.
_ _ _ _ _
The enclosure summarizes by state the number of licensed carriers, the
largest carrier and its market share, and the market share of the five
largest carriers in the small group market. In addition, the enclosure
shows the rank of the largest BCBS carrier and the combined market share
of all BCBS carriers.
As arranged with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days after its issue date. Copies will then be made available upon
request. In addition, the report will be available at no charge on the GAO
Web site at http://www.gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Please call me at (202) 512-7119 if you have any
questions. Major contributors to this report were Randy DiRosa, Assistant
Director; Iola D'Souza, and M. Peter Juang.
John E. Dicken Director, Health Care
Enclosure
Page 2 GAO-06-155R State Small Group Insurance Markets
Enclosure Enclosure
Number of Carriers, Largest Carrier, and Market Share Data for Small Group
Health Insurance Carriers by State
Market share Rank of
Number Market share of five largest Market share
of of largest largest BCBS of all BCBS
licensed carrier carriers carrier carriers
State carriers Largest carrier (percentage) (percentage) (percentage)
Alabama NA BCBS of Alabama 78a NA 1 NA
Alaskab Premera Blue
12 Cross 66 100 1 66
United
Arizona Healthcare
53 Insurance Co. 29 66 2 19
United
Colorado Healthcare
27 Insurance Co. 24 72 3 13
Connecticut 25 Anthem BCBS NA NA 1 NA
Delaware BCBS of
16 Delaware 58 99 1 58
Group
Hospitalization
District of & Medical
Columbia 13 Services (BCBS) 43 97 1 65
United
Florida Healthcare
29 Insurance Co. 22 78 3 31
BCBS Health
Georgia Care Plan of
75c Georgiac 27 c 65c 1c 41c
Idaho 16 BCBS of Idaho 45 97 1 87
Illinois 51 NA NA NA NA NA
Iowa Wellmark BCBS
60 of Iowa 56 91 1 68
Kansas 28 BCBS of Kansas NA NA 1 NA
Kentuckyb 10 Anthem BCBS 43 93 1 43
Louisiana
Louisiana Health Service
& Indemnity
35 (BCBS) d 29 d 85d 1d 54d
Maine 12 Anthem BCBS 48 98 1 63
Carefirst
Maryland Bluechoice,
16 Inc. 43 90 1 59
BCBS
Massachusetts 25 Massachusetts 32 86 1 39
Michigan BCBS of
45 Michigan 62 78 1 69
BCBS of
Minnesota 11 Minnesotad 45d 98d 1d 45d
Healthy
Missouri Alliance Life
38 Insurance Co. 46 87 3 8
Montana 13 BCBS of Montana 36 85 1 36
Health Plan of
Nevada 35 Nevada NA NA NA NA
New Jersey Aetna Health,
16 Inc. 37 86 2 27
New Yorke 29 Oxford 21 63 2 36
Page 3 GAO-06-155R State Small Group Insurance Markets
Enclosure Enclosure
Market share Rank of
Number Market share of five largest Market share
of of largest largest BCBS of all BCBS
licensed Largest carrier carriers carrier carriers
State carriers carrier (percentage) (percentage) (percentage)
North BCBS of
Carolina North
32 Carolina 54 89 1 54
Noridian
North Mutual
Dakota Insurance
9 Co. (BCBS) 93 99 1 93
Community
Ohio Insurance
63 Co. (BCBS) 32 79 1 32
Group
Health
Oklahoma Service of
Oklahoma
36 (BCBS) 30 71 1 49
Lifewise
Oregon Health
Plan of
12 Oregon 25 79 5 14
Blue Cross
Rhode and Blue
Island Shield of
Rhode
3 Island NA NA 1 NA
South BCBS of
Carolina South
29 Carolina 49 87 1 49
BCBS of
Tennessee 41 Tennessee 49 85 1 49
United
Texas Healthcare
Insurance
58 Co. 19 59 3 17
Regence
Utahb BCBS of
22 Utah 40 93 1 40
Vermont BCBS of
12 Vermont 73 100 1 84
Virginia Anthem
45 BCBSf NA NA 1 NA
Washington Premera
12 Blue Cross 57 92 1 85
Blue Cross
West Blue
Virginia Shield,
33 Inc. 43 77 1 43
United
Wisconsin Healthcare
of
50 Wisconsind 20d 49d 3d 6d
BCBS of
Wyoming 15 Wyoming 40 74 1 38
Source: GAO survey of state insurance regulators.
Legend: NA = not available.
Notes: Reported data are for December 2004 unless otherwise noted.
Ranking and market share data are based on the number of covered lives
unless otherwise noted.
Four states did not respond to the survey: California, New Hampshire, New
Mexico, and Pennsylvania. In addition, six states did not provide data on
small group carriers or on market share: Arkansas, Hawaii, Indiana,
Mississippi, Nebraska, and South Dakota.
Page 4 GAO-06-155R State Small Group Insurance Markets
Enclosure Enclosure
aThe Alabama Department of Insurance estimated that BCBS of Alabama
represented about 75 to 80 percent of
the small group market. Seventy-eight percent represents the rounded
midpoint of that range.
bData are for December 2003.
cGeorgia reported that there are no standard reporting sources on the
number of carriers and the total number of
covered lives in the small group market, but estimated the number of
carriers at about 75, and estimated the total
number of covered lives to be 851,365. We used the estimated number of
covered lives to calculate rankings and
market share.
dRanking and market share are based on gross premiums.
eData are for January 2005.
fTotal premium data or number of covered lives are not collected for the
small group market. A Virginia Bureau of
Insurance official reported that Anthem BCBS was clearly the largest
carrier in the small group market.
(290490)
Page 5 GAO-06-155R State Small Group Insurance Markets
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