Competition in Health Insurance Markets

The United States relies primarily on private health insurance markets, yet these markets are highly concentrated and becoming more so over time. We document concentration across commercial, Medicare Advantage, and Medicaid markets. We then examine how asymmetric information—particularly adverse selection—interacts with market power to shape premiums, plan design, and consumer welfare. Empirical evidence confirms that insurer consolidation raises premiums. We discuss how antitrust enforcement, risk adjustment, regulation, and informational interventions shape competition and consumer welfare in these markets.