Effects of Implementing State Insurance Market Reform, 2011-2012. Modification of Proposed Premium Increases by State Regulators

06/07/2013

We also analyzed the proportion of filings approved without modification as compared with those changed as a result of interactions with state regulatory agencies (Table 31). This analysis is based on a subset of 1,253 filings from all states (regardless of regulatory review authority) that list both a proposed and an approved rate, which differs slightly from the criteria used in other sections of this report. Filings that were disapproved by regulators or withdrawn list a proposed rate, but do not list an implemented rate.36 In some cases filings obtained from state summary documents did not contain a proposed rate, but by publicly releasing them the state implies their approval. Conversely, some filings from file and use states did not include enough information to give us confidence that the rate was not changed through retrospective review. As a result, discussion of modified rates is limited to the subset of filings for which review is known.

For most of these filings, the regulator approved the initial proposed rate. As shown below in Table 31, we found 240 filings from 2011 and 2012 that had premium increase modifications, with 142 of them in the individual market and 98 in the small group market. Filings with rate modifications accounted for 24.4 percent of all reviewed filings in the individual market and 14.6 percent of all reviewed filings in the small group market. In both study years, the percentage of filings with rate modifications was higher in the individual market than the small group market.

Table 31: Number and Percentage of Filings with Premium Increase Modifications, by Year and Market

  Trends 2008 Trends 2009 Trends 2010 Trends 2011† Trends Total† SMR 2011 SMR 2012 SMR Total
Number of Filings with Premium Increase Modifications
Individual 32 61 85 63 241 55 87 142
Small Group 1 0 13 14 28 32 66 98
All 33 61 98 77 269 87 153 240
Percentage of Filings with Premium Increase Modifications, as a % of all reviews                
Individual 13.7% 14.2% 20.9% 20.6% 17.5% 20.5% 27.8% 24.4%
Small Group 2.0% 0.0% 10.0% 10.4% 7.1% 14.9% 14.5% 14.6%

† - Trends data from 2011 are incomplete (see Methods section).
Note: Percentage is calculated based on the subset of filings with complete rate information – both proposed and approved premium increases.

In the individual market, rate modification did not have a significant impact on rate increases in 2011, but it did have a significant impact in 2012, reducing the magnitude of rate increases by 1 percentage point (Table 32). Similarly in the small group market (Table 33 below), rate modification had a significant effect in 2012, reducing the magnitude of rate increases by 1.6 percentage points.

Table 32: Rates of Premium Increases, Proposed and Approved, by Year - Individual/Conversion

Rate Modification Trends 2008 Trends 2009 Trends 2010 Trends 2011† SMR 2011 SMR 2012
Proposed Rate Increase 11.6% 11.3% 13.1% 10.7% 6.3% 7.9%
Approved Rate Increase 11.3% 10.3%* 11.2%* 8.8%* 5.6% 6.9%*

† Trends data for 2011 are incomplete (see Methods section).
* Estimate is significantly different from Proposed Rate Increase at p < .05.
Note: Calculated based on the subset of filings with complete rate information – both proposed and approved premium increases

Table 33: Rates of Premium Increases, Proposed and Approved, by Year – Small Group

Rate Modification Trends 2008 Trends 2009 Trends 2010 Trends 2011† SMR 2011 SMR 2012
Proposed Rate Increase 12.8% 12.5% 7.3% 5.0% 5.6% 6.7%
Approved Rate Increase 12.5% 12.5% 6.7% 4.5% 5.2% 5.1%*

† Trends data for 2011 are incomplete (see Methods section).
* Estimate is significantly different from Proposed Rate Increase at p < .05.
Note: Calculated based on the subset of filings with complete rate information – both proposed and approved premium increases

The effects of premium increase modification on state-level estimates (for filings with complete rate information) for the individual and small group markets are shown below. In the individual market (Table 34), 17 states in 2011 and 23 states in 2012 had complete rate information and reportable levels of enrollment. Of these states, 11 out of 17 states in 2011 and had rate modifications and 11 out of 23 states in 2012 had rate modifications. In the small group market (Table 35), 15 states in 2011 and 21 states in 2012 met criteria for reporting data. Of these, four out of 15 states in 2011 and eight out of 21 states in 2012 had rate modifications.

Table 34: Rates of Premium Increases, Proposed and Approved, by State for the Individual Market, 2008-2012

  Individual/ Conversion Trends 2008 Proposed Individual/ Conversion Trends 2008 Approved Individual/ Conversion Trends 2009 Proposed Individual/ Conversion Trends 2009 Approved Individual/ Conversion Trends 2010 Proposed Individual/ Conversion Trends 2010 Approved Individual/ Conversion Trends 2011† Proposed Individual/ Conversion Trends 2011† Approved Individual/ Conversion SMR 2011 Proposed Individual/ Conversion SMR 2011 Approved Individual/ Conversion SMR 2012 Proposed Individual/ Conversion SMR 2012 Approved
MEAN US 11.6% 11.3% 11.3% 10.3% 13.1% 11.2% 10.7% 8.8% 6.3% 5.6% 7.9% 6.9%
AL - - - - 9.2% 9.2% - - 7.7% 7.7% 7.1% 7.1%
AR N/R N/R N/R N/R N/R N/R 10.0% 7.2% 11.2% 8.5% - -
CA - - - - - - - - 8.3% 8.3% 9.3% 8.6%
CO N/R N/R N/R N/R 16.4% 16.4% 10.9% 10.9% 2.0% 1.2% 10.6% 10.1%
CT - - 20.1% 20.1% N/R N/R 11.5% 8.2% 1.7% 1.6% 11.0% 6.1%
DC                 N/R N/R (4.7)% (4.7)%
FL 11.4% 11.4% 8.9% 8.8% 17.0% 13.6% 10.1% 9.9% - - - -
HI - - - - - - - -        
IA 2.9% 2.8% 7.6% 7.3% 19.6% 18.4% 11.6% 10.2% 7.3% 6.5% 7.1% 7.1%
ID - - - - - - - -        
IL 14.4% 14.4% 10.4% 10.4% 9.6% 9.6% - - N/R N/R - -
IN 13.5% 13.5% 15.1% 15.1% 10.7% 8.2% N/R N/R 7.3% 4.9% 10.8% 3.3%
KS - - - - - - - - N/R N/R 8.6% 8.4%
KY 8.9% 8.1% 7.1% 7.1% 5.5% 5.5% 2.8% 2.8% N/R N/R 5.4% 5.4%
MA - - - - - - - -        
MD - - - - - - - -        
ME N/R N/R 18.5% 11.0% 15.6% 11.1% 7.5% 5.2% 7.7% 4.9% 4.1% 3.5%
MI N/R N/R N/R N/R N/R N/R N/R N/R 6.8% 6.8% N/R N/R
MN N/R N/R 10.7% 10.7% 7.2% 7.2% 7.3% 7.3% - - 2.6% 2.6%
NC N/R N/R N/R N/R 13.9% 11.6% 6.2% 4.9% 4.5% 3.7% 3.7% 3.7%
NE - - - - 21.8% 21.8% 15.9% 15.0% N/R N/R 11.5% 11.5%
NJ - - 4.1% 4.1% 10.8% 10.8% 12.7% 12.7% - - 9.8% 9.8%
NV                 (12.0)% (12.1)% 9.0% 6.8%
NY                 N/R N/R 17.5% 8.6%
OH - - N/R N/R N/R N/R N/R N/R        
OK - - - - - - - - 10.0% 10.0% 5.6% 5.6%
OR 12.8% 12.2% 16.3% 15.2% 19.8% 14.9% 13.4% 9.0% 13.0% 9.0% 8.1% 6.2%
PA N/R N/R N/R N/R 16.4% 8.6% 8.1% 6.9% 4.5% 3.9% 7.4% 7.2%
RI N/R N/R N/R N/R N/R N/R N/R N/R - - N/R N/R
SD N/R N/R 14.1% 14.1% 17.5% 16.2% - -        
TN                 N/R N/R 8.0% 8.0%
VA - - 13.8% 13.8% 8.7% 8.7% - - 11.8% 11.8% 10.6% 10.6%
WA N/R N/R N/R N/R 14.1% 13.9% 11.9% 10.6% 11.7% 11.4% 9.0% 7.0%
WI 7.3% 7.3% - - - - - - 9.1% 9.1% 10.5% 10.5%

† - Trends data from 2011 are incomplete (see Methods section).
Note: Approved rates differ from those in Table 16 because this Table is restricted to filings with complete rate information – both proposed and approved premium increases. Some estimates are not reportable (N/R) because the proportion of state member months represented in the sub-sample is less than 50%. Missing values for states included in the study are denoted with a dash.

Table 35: Rates of Premium Increases, Proposed and Approved, by State for the Small Group Market, 2008-2012

  Small Group Trends 2008 Proposed Small Group Trends 2008 Approved Small Group Trends 2009 Proposed Small Group Trends 2009 Approved Small Group Trends 2010 Proposed Small Group Trends 2010 Approved Small Group Trends 2011† Proposed Small Group Trends 2011† Approved Small Group SMR 2011 Proposed Small Group SMR 2011 Approved Small Group SMR 2012 Proposed Small Group SMR 2012 Approved
MEAN US 12.8% 12.5% 12.5% 12.5% 7.3% 6.7% 5.0% 4.5% 5.6% 5.2% 6.7% 5.1%
AL 8.4% 8.4% - - - - - - 3.9% 3.9% N/R N/R
AR - - - - - - - -        
CA - - - - - - - - 7.3% 7.2% 5.3 % 5.3 %
CO - - 5.4% 5.4% 8.8% 8.8% 3.8% 3.8% 0.1% 0.1% 6.3% 6.3%
CT - - - - 15.3% 15.2% N/R N/R 5.1% 3.9% 11.1% 7.6%
DC                 N/R N/R 7.5% 7.5%
FL 19.2% 19.2% 16.4% 16.4% 13.1% 10.9% 7.2% 7.2% - - - -
HI - - - - - - - -        
IA - - - - - - - - N/R N/R N/ R N/ R
ID - - - - - - - -        
IL - - - - - - - - - - - -
IN N/R N/R 21.0% 21.0% -1.1% -1.2% 1.7% 1.7%        
KS - - - - - - - - 2.6% 2.6% 1.2% 1.2%
KY -0.4% -0.4% 3.7% 3.7% 5.4% 5.4% 6.1% 6.1% (1.0)% (1.0)% 3.4% 3.4%
MA - - - - - - - -        
MD - - - - - - - -        
ME - - - - N/R N/R 6.7% 6.7% 10.2% 9.9% 10.5% 7.1%
MI - - - - - - - - 2.6% 2.6% 5.9% 5.9%
MN N/R N/R N/R N/R 0.1% 0.1% -1.2% -1.2% - - (0.6)% (0.6)%
NC 40.0% 40.0% - - - - 9.0% 9.0% 10.1% 10.1% 6.4% 6.4%
NE - - - - - - N/R N/R N/R N/R N/R N/R
NJ - - - - - - - - - - 5.2% 5.2%
NV                 0.2% 0.2% 1.9% 1.6%
NY                 16.1% 14.4% 15.6% 8.9%
OH - - N/R N/R 4.3% 4.3% -0.4% -0.4%        
OK - - - - - - - - N/R N/R 1.5% 1.0%
OR 4.7% 4.7% 5.9% 5.9% 13.1% 12.7% 7.4% 6.0% 7.3% 6.1% 5.3% 4.2%
PA N/R N/R N/R N/R N/R N/R N/R N/R - - 2.6% 2.6%
RI - - - - 2.0% 1.3% 14.3% 11.6% - - 5.7% 4.0%
SD - - - - - - - -        
TN                 (2.4)% (2.4)% (2.5)% (2.5)%
VA - - - - - - - - (1.1)% (1.1)% 3.1% 3.1%
WA - - - - 4.2% 4.2% N/R N/R 13.2% 13.2% 4.9% 3.0%
WI - - - - - - - - N/R N/R 3.7% 3.7%

† - Trends data from 2011 are incomplete (see Methods section).
Note: Approved rates differ from those in Table 16 because this Table is restricted to filings with complete rate information – both proposed and approved premium increases . Some estimates are not reportable (N/R) because the proportion of state member months represented in the sub-sample is less than 50%.


36 However, carriers may in some cases file a new application (under a separate tracking number) during the next or even the same quarter, or may aggregate plans differently in subsequent filings. We cannot therefore conclude that policyholders covered by disapproved filings were not subject to a rate increase.

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