LOS ANGELES (MarketWatch) — Health insurers are consolidating their market power throughout the nation as nearly two-thirds of U.S. cities are dominated by two carriers and nearly half of all metro areas are controlled by one, a study released Tuesday finds.

In its annual examination of the potential for monopolies among health insurers, the American Medical Association contends that in 60% of the nation’s 359 largest metro areas, the two largest health insurers had a combined market share of 70% or more.

The study also finds that in 48% of cities, one insurer had a market share of 50% or more. AMA’s examination also finds that virtually all — 99% — of health insurance markets in the U.S. are “highly concentrated” according to Department of Justice and Federal Trade Commission guidelines.

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“The market power of health insurers places physicians and patients at a significant disadvantage,” Dr. Cecil B. Wilson, the AMA’s president, said in a press release. “When insurers dominate a market, people pay higher health insurance premiums than they should, and physicians are pressured to accept unfair contract terms and corporate policies, which undermines the physician role as patient advocate.”

The study, however, has often become a bone of contention for America’s Health Insurance Plans, the trade group that represents managed-care plans and health carriers.

Speaking just before the study was available, AHIP President Karen Ignagni said that a variety of health coverage is more widely available than AMA studies in the past have contended. She adds the examinations “cherry pick” data to paint a monopolistic picture but often doesn’t include figures from self-insured employers, which can comprise more than half the market.

“In the past, the data have been seriously flawed,” Ignagni said.

The AMA counters, however, that the lion’s share of the self-insured are included under the portion of the preferred-provider study. Only HMO members who are self-insured are not included, the AMA says.

AHIP officials also point out that one state highlighted for its heavily concentrated market, Alabama, has some of the lowest insurance rates in the nation.

The AMA study shows that 93% of the state’s combined preferred-provider and health maintenance organization market is controlled by Blue Cross Blue Shield of Alabama.

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Other states where a single insurer controls at least half the market include Alaska, Arkansas, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Massachusetts and Michigan.

There’s also Minnesota, Mississippi, Nebraska, New Hampshire, North Carolina, Rhode Island, South Carolina, South Dakota, Tennessee and Virginia.

The study didn’t examine four states, including North Dakota, which at last check was found to have its Blue Cross Blue Shield in control of more than 90% of the market.

But the paper did find that in 24 states, the two largest insurers had combined share of 70% or more. Growing more consolidated were markets in Florida, New Mexico, Oklahoma, South Carolina and Tennessee.

The AMA points out that figures from 2008 show that the health insurance market is getting more consolidated on every front.

In its 2008 examination, the AMA found that the two top insurers held a combined share of 70% or more in 53% of the markets. It also says the earlier study showed a single insurer with a majority market share in 44% of the cities and that the two largest insurers held a combined 70% share in 18 states.