Competition among US private insurance companies has generally declined since 2011 in large-group, small-group, and individual markets, a government report found. However, the trend has slowed or even reversed in some states over the past few years.

Meanwhile, an American Medical Association (AMA) analysis warns that "the vast majority of health insurance markets remain stubbornly highly concentrated and at risk for insurer mergers to substantially lessen competition."

The findings, released in a pair of recent reports, paint a picture of an insurance market that's dominated in many states and regions by three or fewer competitors. But there hasn't been a rush toward concentration like the one that's been seen among hospitals and physicians over the past few years, University of New Hampshire, Durham, New Hampshire, professor of health economics Bradley Herring, PhD, told Medscape Medical News. "There are increases, but they're not really dramatic," he said. "We're not seeing big mergers in the health insurance sector."

The government report was conducted by the GAO. It examines the state of the private health insurance market, which covers two thirds of the US population, from 2011 to 2022.

Here are some findings from the report:

The AMA report examines data about the concentration of private insurers in states and metro areas in 2023. "Commercial markets in metropolitan statistical areas have remained stubbornly highly concentrated over the last decade," said Bruce A. Scott, MD, AMA president and an otolaryngologist based in Louisville, Kentucky, in an interview.

Here are some findings from the report:

What does less insurer competition mean for clinicians? "High market concentration tends to lower competition and facilitate the exercise of market power," AMA's Scott said. "When insurers exercise market power, health plan premiums would be higher, and payments to providers and the quantity of healthcare would be lower, in comparison to competitive health insurance markets."

However, the University of New Hampshire's Herring said this isn't the only scenario when insurer competition dwindles. He's conducted research that suggests insurers don't have a lot of room to jack up premiums even if competition disappears. "They still want to sell health insurance policies, right? There's some kind of limit in terms of passing on a really, really high health insurance premium," he said. And government regulations limit how much insurers can spike premiums.

But insurers can still goose profits by negotiating to pay lower prices to providers and hospitals, he said. "They're the ones that really stand to lose."

What about the insurer argument that consolidation leads to less administrative overhead? "I haven't really seen data that suggest larger insurers are more efficient," Herring said.

What happens now? It's not clear whether the new Trump administration will continue the Federal Trade Commission's crackdown on health insurer mergers, said Alison Evans Cuellar, PhD, MBA, of George Mason University College of Public Health in Fairfax, Virginia., in an interview. "The FTC has had recent, notable successes," she said.

Meanwhile, "state attorneys general have an important role to play as well," she said, "although if enforcement is uneven across states, then we get greater disparities in our healthcare system."

Herring had no disclosures. Cuellar disclosed funding from NIH and the Robert Wood Johnson Foundation.