Unbiased Analysis of Today's Healthcare Issues

California Health Care Market

Written By: Jason Shafrin - Feb• 09•09

In her California Healthcare Foundation report, Katherine Wilson does a nice job describing the health insurance market in California.  A little over health of individuals received health care from their employer or themselves (56%), a quarter of individuals receive health insurance through public programs, and 19% of Californians are uninsured (see chart). 

The private health insurance market cannot be portrayed as a monopoly nor one that is truly competitive in the neoclassical sense.  A handful of insurance carriers dominate the market.  Kaiser, Blue Cross, HealthNet, Blue Shield, Pacificare, and Aetna control 77% of the market (see chart).  

Of the premiums insurers receive, the percentage of revenues going to medical care varies widely.  Kaiser spends 93% of revenue on medical expenses, but Blue Shield and Pacificare’s traditional insurance plans spend only 70% of revenues on medical expenses.  Administrative expense ratios are also much lower for Kaiser (3.6%) than for providers such as Blue Shield’s tradiational Insurance plan (22.7%). More details about load factors are available here (see chart).

The full CHCF report can be viewed here.

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