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Structuring Health Insurance Markets

Measuring & Monitoring Health Insurance Markets


Deborah Chollet, Ph.D., Vice President, Alpha Center, Washington, D.C.

Dr. Chollet enumerated several reasons why States need to measure and monitor health insurance markets, such as:

  • Knowing the results of competition.
  • Enforcing regulation.
  • Monitoring plans' financial performance.
  • Developing rules for competition and financial performance.
  • Evaluating the impact of health insurance reforms and revising them as needed.

She then discussed potential sources of information about health insurance markets that are available to States. Most State departments of insurance and health require insurers to file financial reports which are a good source of information for aggregate premiums, losses, reinsurance and other financial data. Departments of insurance also require insurer product and rate filings which describe product designs and report standard price levels. State employee plan medical claims data may be a source of medical cost and cost growth information.

Dr. Chollet examined what States' health insurance markets look like and found:

  • Group insurance markets are much bigger than individual markets.
  • On average, each insurer in the group market does more volume than each insurer in the individual market.
  • In both markets, only a few insurers hold most of the business; 50-80 percent of insurers, taken together, hold very little market share.
  • The distribution of market share among Blue Cross Blue Shield (BCBS), health maintenance organizations (HMOs), and commercial insurers varies from State to State.
  • In many States, insurer loss ratios suggest that markets may be noncompetitive.

Dr. Chollet suggested several reasons why State markets look the way they do: historical accident, State policy toward BCBS and HMOs, and insurance market regulations. She also suggested ways of improving information about health insurance markets, including requiring selective new reporting, coordinating reporting to different State agencies, requiring full periodic reporting of products, and using the data available.


Chollet DJ, Kirk AM, Ermann RD. October 1997. Mapping Insurance Markets: The Group and Individual Markets in 26 States. Washington D.C.: Alpha Center.

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