A Brief Analysis of Health Insurance Competition and Commercial Market Share


Pennsylvanias Commercial Market as of December 2016

Health plan market share is an important measure of competitive positioning for insurers. Health insurance carriers often assess the number of people enrolled in their health plans at the state level or at a more defined geographic area to determine their market position. Companies not only look at their own market position but also routinely analyze competitor membership to evaluate relative market share. In this brief, Mark Farrah Associates (MFA) presents an overview of market demographics and market share data, with a focus on health plan market position in three Metropolitan Statistical Areas in Pennsylvania.

Market Demographics

Health insurance competition can be assessed by using many performance variables with health plan enrollment and market share metrics being the most common. Enrollment can be divided into two core segments, commercial health insurance and government-sponsored programs. The largest segment within the commercial market is employer-based plans, also known as the group segment. The group segment includes fully-insured/risk-based policies or self-funded/ASO (administrative services only) arrangements with employers. Individual or non-group plans, including Marketplace products, are also part of the commercial segment. Government programs, Medicare and Medicaid, provide coverage for the elderly or people with disabilities and low income populations.

As of December 31, 2016, insurance companies provided medical coverage for approximately 264 million people, based on enrollment as reported in Mark Farrah Associates’ Health Coverage Portal™. The employer-based ASO and risk-based segments remained the largest sources of coverage in the industry, collectively enrolling 196 million people in the commercial segment. Medicaid and SCHIP programs enrolled nearly 75 million people and within this segment, approximately 51 million are covered by managed care plans. Approximately 57 million seniors were enrolled in Medicare programs at year-end 2016. This included more than 38.7 million people with original Medicare and 18.7 million members enrolled in Medicare Advantage plans.

Competition and Market Share

To analyze health insurance competition, analysts often start with state-by-state assessments of competitor enrollment and market share. Data from statutory filings can provide valuable insights about state health insurance competition. Based on data filed in statutory financial reports from the NAIC (National Association of Insurance Commissioners) and the CA DMHC (California Department of Managed Health Care), Mark Farrah Associates’ Health Coverage Portal™ is a tool widely used by health plans for easy access to market share data and financial performance metrics.

For the purposes of this brief, MFA first looked at the competitive mix in Pennsylvania’s commercial market by analyzing state enrollment figures from the Health Coverage Portal™. The chart below illustrates the leading companies in Pennsylvania’s commercial health insurance market. Three Blue Cross Blue Shield affiliates and Aetna comprise the largest percentage of market share for the state.

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