United States Government Accountability Office

Washington, DC 20548 

February 27, 2009 

The Honorable Olympia J. Snowe 

Ranking Member 

Committee on Small Business and Entrepreneurship 

United States Senate 

The Honorable Christopher S. Bond

United States Senate 

The Honorable Richard J. Durbin 

United States Senate 

The Honorable Blanche L. Lincoln 

United States Senate 

Subject: Private Health Insurance: 2008 Survey Results on Number and Market Share of 

Carriers in the Small Group Health Insurance Market

As a follow-up to our 2005 and 2002 reports on the competitiveness of the small group health 

insurance market, you requested updated information on each state and the District of 

Columbia.1

 Specifically, this report provides information from states and the District of 

Columbia (hereafter referred to as a state) on the number of carriers licensed in the small 

group market, the largest carriers, and their market share.2

To obtain this information, we sent an electronic survey to the office responsible for 

regulating insurance, health plans, or both in all 51 states. After following up with 

nonresponding states by e-mail and telephone, all but 1 state completed the survey. Of the 50 

states that responded, however, 3 were unable to provide the requested information on small 

group carriers and their market share. For the remaining 47 states, not all had the 

information needed to answer all of the questions. For example, 44 states reported the largest 

carrier and 39 states provided market share data. Also, the 47 states varied in how they

defined the size of a small group. Most—33—defined a small group as 2 to 50 employees; 12 

defined a small group as 1 to 50 employees; and 2 had another definition. Finally, states 

generally reported information as of December 2007, though 6 states were able to provide 

2008 numbers, and 3 states were limited to data from 2006. We did not independently validate 

 1

GAO, Private Health Insurance: Number and Market Share of Carriers in the Small Group Health 

Insurance Market in 2004, GAO-06-155R (Washington, D.C.: Oct. 13, 2005); and GAO, Private Health 

Insurance: Number and Market Share of Carriers in the Small Group Health Insurance Market, 

GAO-02-536R (Washington, D.C.: Mar. 25, 2002). 

2

A carrier is generally an entity (either an insurer or managed health care plan) that bears the risk for 

and administers a range of health benefit offerings. 

 GAO-09-363R State Small Group Health Insurance Markets 
the information provided by the states. However, in the survey, we asked states to describe 

the source of the information reported and provide clarifying information about the numbers 

reported. As a result of this information, we excluded some states’ responses from certain 

market share analysis, e.g., if the state had no way of separating data on small group health 

insurance from data on all group health insurance. We performed our work from December 

2008 through February 2009 in accordance with all sections of GAO’s Quality Assurance 

Framework that are relevant to our objectives. The framework requires that we plan and 

perform the engagement to obtain sufficient and appropriate evidence to meet our stated 

objectives and to discuss any limitations in our work. We believe that the information and 

data obtained, and the analysis conducted, provide a reasonable basis for any findings and 

conclusions. Because we did not evaluate the policies or operations of any federal agency to 

develop the information presented in this report, we did not seek comments from any agency. 

The following summarizes the findings from our 2008 survey: 

• The median number of licensed carriers in the small group market per state was 27. 

• The median market share of the largest carrier in the small group market was about 

47 percent, with a range from about 21 percent in Arizona to about 96 percent in Alabama. 

In 31 of the 39 states supplying market share information, the top carrier had a market 

share of a third or more. 

• The five largest carriers in the small group market, when combined, represented threequarters or more of the market in 34 of the 39 states supplying this information, and they 

represented 90 percent or more in 23 of these states. 

• Thirty-six of the 44 states supplying information on the top carrier identified a Blue Cross 

and Blue Shield (BCBS) carrier as the largest carrier, and in all but 1 of the remaining 8 

states, a BCBS carrier was among the five largest carriers. 

• The median market share of all the BCBS carriers in the 38 states supplying this 

information was about 51 percent, with a range of less than 5 percent in Vermont and 

Wisconsin and more than 90 percent in Alabama and North Dakota. 

In comparing what states reported in 2008 to what they previously reported to GAO in 2005

and 2002, we found: 

• The median market share of the largest small group carrier has increased to about 

47 percent in 2008 from the 43 percent reported in 2005 and the 33 percent reported in

2002. Twenty-four of the 29 states providing information in both 2002 and 2008 saw 

increases in the market share of the top carrier that ranged from about 2 to 39 percentage 

points. In contrast, the top carriers in 5 states lost market share with decreases ranging

from about 1 to 16 percentage points. 

• The number of states with a combined market share of the five largest carriers of 

75 percent or more has also increased since our 2002 survey. The combined market share 

of the five largest small group carriers represented three-quarters or more of the market in 

34 of 39 states, compared to 26 of 34 states reported in 2005 and 19 of 34 states reported in 

2002. 

2 GAO-09-363R State Small Group Health Insurance Markets
• Finally, the median market share of all the BCBS carriers in 38 states reporting this 

information in 2008 was about 51 percent, compared to the 44 percent reported in 2005 

and the 34 percent reported in 2002 for the 34 states supplying information in each of 

these years.

The enclosure summarizes by state the number of licensed carriers, the largest carrier and its 

market share, and the market share of the five largest carriers in the small group market. In 

addition, the enclosure shows the rank of the largest BCBS carrier and the combined market 

share of all BCBS carriers. 

– – – – – 

As arranged with your offices, unless you publicly announce the contents of this report 

earlier, we plan no further distribution of it until 30 days after its issue date. Copies will then 

be sent to other interested parties. In addition, the report will be available at no charge on the 

GAO Web site at http://www.gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. Please call me at 

(202) 512-7114 if you have any questions. Major contributors to this report were 

John E. Dicken 

Kristi Peterson, Assistant Director; Susan Barnidge; Grace Materon; and Nelson Olhero. 

Director, Health Care 

Enclosure 

3 GAO-09-363R State Small Group Health Insurance Markets
Enclosure 

Table 1: Results of 2008 Survey on Number of Carriers, Largest Carrier, and Market Share Data for Small 

Group Health Insurance Carriers, as reported by 47 states 

State 

Number 

of 

licensed

carriers Largest carrier

Market share 

of largest 

carrier 

(percentage)

Market share 

of five largest 

carriers 

(percentage) 

Rank of 

largest 

BCBS 

carrier

Market share 

of all BCBS 

carriers 

(percentage)

Alabamaa7 Blue Cross 

Blue Shield 

of Alabama 

96 100 1 96

Alaska 11 Premera Blue Cross 77 94 1 77

Arizona 32bPacificare Life 

Assurance Company 

21 73 2 21

California 28cKaiser Foundation 

Health Plan, Inc.d

37d96d2d41d

Colorado 21 Kaiser Permanente 23 79 3 20

Connecticut 33eAnthem Health 

Plans, Inc.f

46f93f1f46f

Delawarea 14 Blue Cross 

Blue Shield of 

Delaware 

58 95 1 58

District of 

Columbia 

14 Group Hospitalization

& Medical 

Services, Inc. 

NA NA 1 NA

Florida 27 Blue Cross & 

Blue Shield of 

Florida, Inc. 

30 87 1 34

Georgia 211 Blue Cross 

Blue Shield 

Healthcare Plan 

of Georgia 

NA NA 1 NA

Hawaii 7 HMSA NA NA 1 NA

Idaho 18 Regence Blue Shield

of Idaho 

49 98 1 90

Illinois 53 Health Care Service 

Corporationf

51f82f1f51f

Indiana 328 NA NA NA NA NA

Iowaa28 Wellmark, Inc. 60 90 1 60

Kansas 22 Blue Cross & 

Blue Shield of 

Kansas, Inc. 

NA NA 1 NA

Kentuckya13 Anthem Health 

Plans of KY 

47 96 1 47

Louisianaa403gLouisiana Health 

Service & 

Indemnity Co.f

53f87f1f53f

Maine 8 Anthem BC/BS 56 96 1 56

Maryland 16 CareFirst

BlueChoice, Inc. 

51 90 1 71

Massachusetts 28 Blue Cross and 

Blue Shield of 

Massachusetts 

HMO Blue, Inc. 

44 88 1 52

4 GAO-09-363R State Small Group Health Insurance Markets 
Enclosure

State 

Number 

of 

licensed

carriers Largest carrier

Market share 

of largest 

carrier 

(percentage)

Market share 

of five largest 

carriers 

(percentage) 

Rank of 

largest 

BCBS 

carrier

Market share 

of all BCBS 

carriers 

(percentage)

Michigan 49 Blue Cross 

Blue Shield 

of Michigan 

47 77 1 58

Minnesota 17 Blue Cross and 

Blue Shield 

of Minnesota 

42 95 1 42

Missouri 50 Health Alliance 

Life Ins. Co. 

30 73 3 17

Montana 13 Blue Cross 

Blue Shield 

of Montana 

38 91 1 38

Nebraska 58 BlueCross/BlueShield

of Nebraska

NA NA 1 NA

Nevada 28 Health Plan 

of Nevada

NA NA In top 5 NA

New 

Hampshire 

10 Anthem-NH 50 99 1 50

New Jersey 13 Horizon Health Care 

Services Inc. 

28 86 1 46

New Yorka31 Oxford Health

Insurance and 

Oxford Health 

Plans, Inc. 

26 74 2 42

North Carolina 27 Blue Cross 

Blue Shield of 

North Carolina

65 94 1 65

North Dakota 10 Noridian Mutual

Insurance 

Company dba 

BlueCrossBlueShield 

of North Dakota

91 99 1 91

Ohio 180hAnthem Insurance 

Group 

35 85 1 35

Oklahoma 25 Healthcare Services

Corp., BC/BS 

of Oklahoma 

51 82 1 53

Oregona15 Regence Blue Cross

Blue Shield 

44 79 1 51

Rhode Island 4 Blue Cross & 

Blue Shield of 

Rhode Island 

84 100 1 84

South Carolina 27 Blue Cross 

Blue Shield of SC 

47 93 1 56

South Dakotaa15 Wellmark Blue Cross 

Blue Shield of SD 

62 94 1 62

Tennessee 33 Blue Cross 

Blue Shield of 

Tennessee 

68 94 1 68

Texas 46 Blue Cross & 

Blue Shield of Texas 

27 68 1 28

Utah 31 NA 39 97 NA NA

5 GAO-09-363R State Small Group Health Insurance Markets
Enclosure

State 

Number 

of 

licensed

carriers Largest carrier

Market share 

of largest 

carrier 

(percentage)

Market share 

of five largest 

carriers 

(percentage) 

Rank of 

largest 

BCBS 

carrier

Market share 

of all BCBS 

carriers 

(percentage)

Vermont 5 MVP Health Plan, 

Inc. 

45 100 5 1

Virginia 36 NA NA NA NA NA

Washingtoni10 Regence BlueShield 45 94 1 79

West Virginia 27jMountain State

BlueCross BlueShield 

(Highmark) 

52 86 1 52

Wisconsin 41 United HealthCare

Insurance Co. 

32 56 Not in top 5 4

Wyoming 12 Blue Cross Blue

Shield of Wyomingk

51k94k1k51k

Source: GAO 2008 survey of state insurance regulators. 

Legend: NA = Not available. 

Notes: Reported data are for December 2007 unless otherwise noted. 

Ranking and market share data are based on the number of covered lives unless otherwise noted. 

One state did not respond to the survey: Mississippi. In addition, 3 states responding to the survey were unable to provide data 

on small group carriers and on market share: Arkansas, New Mexico, and Pennsylvania. 

a

Data are as of the following dates: Delaware, December 2008; Alabama, New York, Oregon, South Dakota, and Virginia, June 

2008; and Iowa, Kentucky, and Louisiana, December, 2006. 

b

Arizona’s data are limited to licensed carriers that had more than $100,000 in annual premiums. 

c

Number represents licensed insurers and licensed managed care plans. 

d

Data reported represent managed health care plans only. California does not have market share data for insurance companies 

selling small group health insurance. 

e

State clarified that though 33 carriers were licensed, only 19 carriers were marketing small group products. 

f

Ranking and market share data for these states are based on gross premiums. 

g

State clarified that though 403 carriers were licensed to sell small group health insurance, only 28 carriers collected premiums 

in 2006. 

h

State clarified that though 180 carriers were licensed to sell small group health insurance, 27 carriers were collecting 

premiums and/or marketing small group products. 

i

Data do not include disability carriers renewing or issuing small group plans. The state, however, reported that the market 

share of disability carriers is not significant. 

j

State clarified that of the 27 licensed carriers, 25 were renewing existing small group policies and 23 were selling new small 

group policies. 

k

Ranking and market share data are based on number of covered employees.

(290749) 

6 GAO-09-363R State Small Group Health Insurance Markets
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