Private health insurance in the United States has become more concentrated since 2011, the Government Accountability Office reported in the seventh edition of its periodic study, finding that the number of states where three or fewer insurers hold at least 80 percent of enrolment generally increased across the individual, small group and large group markets between 2011 and 2024.
The individual exchanges tell the more recent part of the story. The number of states where the exchanges were concentrated rose from 47 in 2015 to a peak of 51 in 2020, then eased to 49 states in 2024, a modest loosening after a decade of tightening, and one that still leaves the exchanges concentrated in nearly every state by GAO’s definition.
GAO’s definition is mechanical, which is its strength: a market counts as concentrated when the three largest issuers together enrol at least 80 percent of its members. By that measure most Americans buy health coverage in markets where three companies set the effective terms, a structural fact that sits underneath the annual fights over premiums, subsidies and eligibility rules, including the Treasury and IRS benefits guidance covered in this edition yesterday.
The study is mandated by the Affordable Care Act and built from enrolment data insurers report to the Centers for Medicare and Medicaid Services. Its implication for policy is uncomfortable for both parties: the competitive market the statute assumed exists in only a minority of states, and the trend over thirteen years runs the other way.