GAO-06-155R State Small Group Insurance Markets 

United States Government Accountability Office

Washington, DC 20548 

October 13, 2005 

The Honorable Olympia J. Snowe 

Chair 

Committee on Small Business and Entrepreneurship 

United States Senate 

The Honorable Christopher “Kit” Bond 

United States Senate 

The Honorable James M. Talent 

United States Senate 

Subject: Private Health Insurance: Number and Market Share of Carriers in the 

Small Group Health Insurance Market in 2004 

As a follow-up to our 2002 report on the competitiveness of the small group health 

insurance market,1

 you requested updated information on each state and the District 

of Columbia. Specifically, you asked us to identify—for each state—the number of 

carriers2 licensed in the small group market, the largest carriers, and their market 

share.

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

regulating insurance, health plans, or both in all 50 states and the District of Columbia 

(hereafter referred to as a state). We followed up with nonresponding states by e-mail 

and by telephone and received responses from 47 states. However, not all 47 states 

had the information needed to answer all of the questions. For example, 40 states 

reported the largest carrier and 34 states provided market share data. Also, the 

responding states varied in how they defined the size of a small group. Most—35—

defined a small group as 2 to 50 employees, 10 defined a small group as 1 to 50 

employees, and 1 had another definition.3

 We did not verify the information provided 

by the states. We performed our work from August through October 2005 in 

accordance with generally accepted government auditing standards. 

The following summarizes our findings: 

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

28, with a range from 3 in Rhode Island to 75 in Georgia. 

 1

 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. 3

 Missouri defined small group as from 3 to 25 employees. 
Page 2 GAO-06-155R State Small Group Insurance Markets 

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

about 43 percent, with a range from about 19 percent in Texas to about 93 

percent in North Dakota. 

• The five largest carriers in the small group market, when combined, represented 

three-quarters or more of the market in 26 of the 34 states supplying information, 

and they represented 90 percent or more in 12 of these states. 

• Thirty of the 40 states supplying information identified a Blue Cross and Blue 

Shield (BCBS) carrier as the largest carrier offering health insurance in the small 

group market, and in all but 1 of the remaining 10 states, a BCBS carrier was 

among the five largest carriers. 

• The median market share of all the BCBS carriers in the 34 states supplying 

information was about 44 percent, with a range from about 6 percent in 

Wisconsin to about 93 percent in North Dakota; in 13 of these states BCBS 

carriers combined for half or more of the market. 

• The market share of the largest small group carrier has increased since our 2002 

report. The median market share of the largest small group carrier was about 43 

percent, compared to the 33 percent reported in 2002. The combined market 

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

of the market in 26 of 34 states, compared to 19 of 34 states reported in 2002. 

Finally, the median market share of all the BCBS carriers in 34 reporting states 

was about 44 percent, compared to the 34 percent reported in 2002. 

_ _ _ _ _ 

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 made available upon request. 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) 512-7119 if you have any questions. Major 

contributors to this report were Randy DiRosa, Assistant Director; Iola D’Souza, and 

M. Peter Juang. 

John E. Dicken 

Director, Health Care 

Enclosure 
Enclosure Enclosure 

Page 3 GAO-06-155R State Small Group Insurance Markets 

Number of Carriers, Largest Carrier, and Market Share Data for Small Group 

Health Insurance Carriers by State

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)

Alabama NA BCBS of Alabama 78a

 NA 1 NA 

Alaskab

12 Premera Blue Cross 66 100 1 66

Arizona 

53 

United Healthcare 

Insurance Co. 29 66 2 19 

Colorado 

27 

United Healthcare 

Insurance Co. 24 72 3 13 

Connecticut 25 Anthem BCBS NA NA 1 NA 

Delaware 16 BCBS of Delaware 58 99 1 58 

District of 

Columbia 13 

Group Hospitalization & 

Medical Services (BCBS) 43 97 1 65 

Florida 

29 

United Healthcare 

Insurance Co. 22 78 3 31 

Georgia 

75c

BCBS Health Care Plan 

of Georgiac 27 c 65c

 1c 41c

Idaho 16 BCBS of Idaho 45 97 1 87 

Illinois 51 NA NA NA NA NA 

Iowa 

60 Wellmark BCBS of Iowa 56 91 1 68 

Kansas 28 BCBS of Kansas NA NA 1 NA 

Kentuckyb

10 Anthem BCBS 43 93 1 43 

Louisiana 

35 

Louisiana Health Service 

& Indemnity (BCBS) d 29 d 85d

 1d 54d

Maine 12 Anthem BCBS 48 98 1 63 

Maryland 

16 

Carefirst Bluechoice, 

Inc. 43 90 1 59 

Massachusetts 25 BCBS Massachusetts 32 86 1 39 

Michigan 45 BCBS of Michigan 62 78 1 69 

Minnesota 11 BCBS of Minnesotad

 45d 98d 1d 45d

Missouri 

38 

Healthy Alliance Life 

Insurance Co. 46 87 3 8 

Montana 13 BCBS of Montana 36 85 1 36 

Nevada 35 Health Plan of Nevada NA NA NA NA 

New Jersey 16 Aetna Health, Inc. 37 86 2 27 

New Yorke 29 Oxford 21 63 2 36 
Page 4 GAO-06-155R State Small Group Insurance Markets 

Enclosure Enclosure 

 Source: GAO survey of state insurance regulators. 

 Legend: NA = not available. 

 Notes: Reported data are for December 2004 unless otherwise noted. 

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

 Four states did not respond to the survey: California, New Hampshire, New Mexico, and Pennsylvania. In 

 addition, six states did not provide data on small group carriers or on market share: Arkansas, Hawaii, Indiana, 

 Mississippi, Nebraska, and South Dakota. 

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)

North Carolina 

32 

BCBS of North 

Carolina 54 89 1 54 

North Dakota 

9 

Noridian 

Mutual 

Insurance Co. 

(BCBS) 93 99 1 93 

Ohio 

63 

Community 

Insurance Co. 

(BCBS) 32 79 1 32 

Oklahoma 

36 

Group Health 

Service of 

Oklahoma 

(BCBS) 30 71 1 49 

Oregon 

12 

Lifewise Health 

Plan of Oregon 25 79 5 14 

Rhode Island 

3 

Blue Cross and 

Blue Shield of 

Rhode Island NA NA 1 NA 

South Carolina 

29 

BCBS of South 

Carolina 49 87 1 49 

Tennessee 41 

BCBS of 

Tennessee 49 85 1 49 

Texas 

58 

United 

Healthcare 

Insurance Co. 19 59 3 17 

Utahb

22 

Regence BCBS 

of Utah 40 93 1 40 

Vermont 

12 

BCBS of 

Vermont 73 100 1 84 

Virginia 45 Anthem BCBSf

 NA NA 1 NA 

Washington 

12 

Premera Blue 

Cross 57 92 1 85 

West Virginia 

33 

Blue Cross Blue 

Shield, Inc. 43 77 1 43 

Wisconsin 

50 

United 

Healthcare of 

Wisconsind

 20d 49d 3d 6d

Wyoming 15 

BCBS of 

Wyoming 40 74 1 38 
Enclosure Enclosure 

Page 5 GAO-06-155R State Small Group Insurance Markets 

 aThe Alabama Department of Insurance estimated that BCBS of Alabama represented about 75 to 80 percent of 

 the small group market. Seventy-eight percent represents the rounded midpoint of that range. bData are for December 2003. cGeorgia reported that there are no standard reporting sources on the number of carriers and the total number of 

 covered lives in the small group market, but estimated the number of carriers at about 75, and estimated the total 

 number of covered lives to be 851,365. We used the estimated number of covered lives to calculate rankings and 

 market share. 

 dRanking and market share are based on gross premiums. eData are for January 2005. 

f

Total premium data or number of covered lives are not collected for the small group market. A Virginia Bureau of 

Insurance official reported that Anthem BCBS was clearly the largest carrier in the small group market. 

 (290490) 
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