Paying A Premium On Your Premium? Consolidation In The U.S. Health Insurance Industry
The authors examine whether and to what extent consolidation in the U.S. health insurance industry is leading to higher employer-sponsored insurance premiums. They make use of a proprietary, panel dataset of employer-sponsored health plans enrolling over 10 million Americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration. They exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market-level premiums.