10 STATES WITH THE LEAST COMPETITIVE HEALTH INSURANCE MARKETS

The following information was released by the American Medical Association (AMA):

Find out if your state is on this top 10 listone where patients and physicians definitely don't want it to be.

By

Kevin B. O'Reilly Senior News Editor

May 13, 2026

The report's authors analyzed 2024 data across 384 metropolitan areas, all 50 states, and the District of Columbia. They reviewed data on health-insurance enrollment from the Decision Resources Group, identifying the two largest insurers in each market and using2023 federal merger guidelines to classify how concentrated those markets are. Specifically, they used the Herfindahl-Hirschman Index (HHI) to measure market concentration and competition.

A "highly concentrated" market exceeds a regulatory threshold set by federal guidelines and lacks adequate health insurer competition. That is when the HHI is greater than 1,800.

10 states with biggest insurer edge

The report presents and the data below pertain to combined data on four commercial insurance product lines, including preferred provider organizations (PPOs), health maintenance organization (HMOs), point-of-service (POS) and public health exchanges.

Here are the 10 states (PDF) with the least competitive commercial health insurance markets for 2024, with the market share of the largest health insurer and the HHI:

Alabama84% (HHI: 7,193).

Kentucky76% (HHI: 5,960).

Hawaii66% (HHI: 4,890).

Michigan65% (HHI: 4,484).

Louisiana62% (HHI: 4,332).

Illinois62% (HHI: 4,284).

Alaska47% (HHI: 4,058).

Vermont59% (HHI: 4,054).

Delaware58% (HHI: 4,021).

West Virginia59% (HHI: 3,822).

"Between 2014 and 2024, 54% of commercial markets experienced an increase in the HHI, and in 25% of markets the increase was at least 500 points," says the report, which notes that the average HHI rose by 164 points between 2014 and 2024. However, the exchanges tempered that increase. Excluding the exchanges, the average HHI went up by 418 points. The average commercial market had an HHI of 3486 in 2024.

In practical terms, as other empirical evidence suggests, expect insurance premiums to be higher and payments to physicians and others to be lower than if markets were competitive.

The report is a product of the AMA Division of Economic and Health Policy Research, which conducts independent research on competition in health insurance, pharmacy benefit manager (PBM) and hospital markets.