Baseline Information for Evaluating the Implementation of the Health Insurance Portability and Accountability Act of 1996: Final Report. Question F. How has HIPAA affected premiums in the individual market?


Data are lacking to provide a thorough analysis of this question. Our database review did not uncover any extant source of data to provide information on average premiums. A few sources exist to measure aggregate premiums, but they do not provide information about enrollments or data to standardize premiums for population or benefits.

However, some trends in individual market premiums can be measured using information from risk pools. Most risk pools include a cap on premiums that is tied to individual market rates. Thus, the risk pool administrators acquire information about prevailing rates in the individual market. Monitoring the information that risk pools have, by monitoring changes in the risk pool premium caps , provides data on trends in individual market premiums. Several states that have adopted federal standards have existing risk pools, including CA, CO, MO, and TN. We checked informally with two of these states (CO and MO) on the availability of data about individual market premiums. Both indicated that they do periodically (either annually or semi-annually) collect information from the top five carriers on premiums and that this information would be available to monitor trends in the individual markets in these states.

Individual market premiums may also be affected in states that have adopted the state risk pool as the alternative mechanism, if the broadening of the risk pool alters the remaining risk in the individual market. Thus, the evaluation would collect information from risk pools in states that have used it as the alternative mechanism as well as states that have adopted guaranteed issue. The design in Table 2 presents comparison groups for studying the effects of different HIPAA implementation models on market premiums.

Another way to measure whether participating HIPAA eligibles are a high risk group is to monitor costs per participant in states that have a high risk pool. At minimum, changes in cost per participant in the pre- and post-HIPAA period can be compared using data from Communicating for Agriculture (see the database review in Part III). In addition, our informal discussions with six high risk pools suggested that more detailed information on claims costs and participant months by plan type are available for the pre- and post HIPAA period. This would permit the evaluator to adjust claims costs for any changes over time in the type of plans selected. In addition, it appears likely that control for population composition—at least age-sex mix—may also be data that the risk pools could provide. States were less certain that these cost data could be separated for HIPAA and non-HIPAA participants—though three of the four risk pools that we contacted in states that have adopted the risk pool as their alternative mechanism indicated that their data systems would permit separate estimates. The NASCHIP survey discussed earlier is also attempting to obtain some of these measures from risk pools. In particular, the survey asks about claims payments for HIPAA eligibles, the number of low-risk HIPAA enrollees (as measured by small claims), and the number of high-risk HIPAA enrolless (as measured by claims in excess of $25,000 to date).