AAFP Testimony to Small Business Committee: Health Plan Consolidation Harms Access to Care

When it comes to health insurance, bigger is not necessarily better. In fact, mergers and consolidation of health insurance companies from 95 in 1992 to seven in 2006 has restricted patients’ access to physicians, according to Jim King, M.D., president of the American Academy of Family Physicians.

In some areas, health plan consolidation has resulted in a single company controlling access to health care for as many as 60 percent of patients in a community. Such consolidation has produced larger insurance companies that wield power over employer choice plans, employee choice of health care professionals and physicians’ ability to keep their doors open.

“This market concentration gives these health plans excessive power in determining the conditions of coverage, payment and practice,” King said Oct. 25 in testimony before the U.S. House Small Business Committee (5-page PDF; About PDFs)“… As a result, small businesses are not offered more affordable prices for their employees’ health plans but rather fewer choices of physicians who will accept the plans that are offered.”

Congress can rectify the situation by enacting legislation that changes current anti-trust law, King said.

“One step in this direction would be to engage the medical community on how the anti-trust laws could be changed to better support the small businesses that are medical practices, so that they can negotiate contracts with insurers from a position of equality,” he said.