Michigan’s health insurance market is the second least competitive in the nation

Michigan remained among the least competitive states in the nation for employee health insurance in 2022, although the union representing Blue Cross Blue Shield of Michigan’s competitors says it has made small gains over the past couple of years, according to a study.

In the American Medical Association’s annual report, Michigan again ranked as the second least competitive state because Blue Cross Blue Shield had two-thirds of the state’s market share of all health plans. Grand Rapids-based Priority Health ranked second with a 12 percent market share statewide.

The only state less competitive than Michigan in 2022 was Alabama, where the Blue Cross Blue Shield plan has an 86 percent market share, according to the AMA.

Blue Cross Blue Shield of Michigan has long been the state’s dominant health plan. While the AMA cites the large market share that Detroit-based Blue Cross Blue Shield has historically considered Michigan’s uncompetitive market, a spokeswoman says the annual report data only reflects customer choices and that the state faces competition for employee health coverage.

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The AMA’s conclusions don’t square with the reality that here in Michigan, employers and consumers have a choice of insurers in every health insurance segment, Andy Hetzel said. Blue Cross Blue shields director of corporate communications. The fact that Blue Cross remains the health insurance brand of choice for most Michigan employers and consumers should not be mischaracterized as the result of an uncompetitive market, when it is more reflective of a company that has maintained its industry-leading value proposition among a strong industry. competitors.

Blue Cross Blue Shields’ 67 percent state market share through 2022, down one percentage point from the previous year, came from HMO, PPO, point-of-care health plans and individual policies sold on public health exchanges. The Blues led all state metropolitan statistical areas by wide margins, though rival Priority Health made small gains in West Michigan in 2021-22, according to the AMA report.

Grand Rapids, where Blue Cross Blue Shield had a 53 percent market share in 2022 compared to Priority Health’s 32 percent, was the state’s most competitive market. Priority Health gained two percentage points in market share from 2021 to 2022 in the Grand Rapids area, while Blue Cross Blue Shield declined at the same rate.

The next closest competitive market was Muskegon, which was led by Blue Cross Blue Shield with 62 percent market share compared to Priority Healths’ 26 percent market share. That compared to 63 percent for Blue Cross and 24 percent for Priority Health a year earlier.

Blue Cross Blue Shield was even more dominant among PPO health plans, with 78% market share in the state and 8% of Aetna, which owns CVS Health Corp. Blue Cross Blue Shield led the PPO market share by equal margins in markets across the state. They contain:

  • 73% to Priority Healths 10% in the Grand Rapids area,
  • 86% to Cignas 5% in the Kalamazoo area,
  • 77% Priority Healths to 9% in Muskegon,
  • 80% to Aetnas 8% in the Niles-Benton Harbor MSA and
  • 86% to Priority Healths 4% in Battle Creek.

Each year, the AMA analyzes the data and publishes a report that identifies the top two market share leaders in 381 metropolitan statistical areas across the country.

As the 2023 annual report shows that Blue Cross Blue Shields has continued to hold strong in the statewide market, the Michigan Association of Health Plans cites its own data showing increasing profits for members.

MAHP members had a combined market share of 26.5% in 2022 in small and large group, individual and self-insured health insurance covering more than 5.5 million people, up from 21.75% in 2020.

Blue Cross Blue Shields’ market share of similar health plans fell from 75.4 percent in 2020 to 70.94 percent in 2022, according to MAHP data.

2022 alone was the most significant increase in our members’ combined market share and insured life insurance, as MAHP members’ combined market shares increased by three and a half percentage points from 2021, Brian Mills, the association’s vice president of commercial markets and communications, wrote in an email. Crain’s Grand Rapids Business.

Our members are making steady progress in the commercial market, Mills said. The market share of MAHP members has increased in the commercial market, and they were proud of the members’ versatile offering and the increase in market share.

Requires passage of state law in fall 2022 Mills said insurance companies provide medical claims information to employers to provide health coverage to employees. Next year is the first full year that our members have been able to use this tool to encourage more employers to shop, he said.

Nationally, the AMA concluded that nearly three-quarters of the US market is highly concentrated.

Most health insurance markets are ripe for the exercise of market power by health insurers to the detriment of consumers and care providers, the authors of the AMA’s annual report wrote.

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