Effects of Implementing State Insurance Market Reform, 2011-2012. National Trends: Individual and Small Group Markets

06/07/2013

Over the study period, the rate of growth in premiums on a national scale was about constant in the individual market, but declined significantly in the small group market. The average premium increase in the individual market was 7.0 percent in 2011 and 7.1 percent in 2012, down from 11.7 percent in 2010. In contrast, the small group premium growth rate declined significantly from 2011 to 2012. In 2010, the year before the ACA rate review, the figure was 8.8 percent. The average premium increase in this market was 6.1 percent in 2011 and 4.8 percent in 2012 (Table 14).

Table 14: Average Rate of Premium Increase, by Year and Market

Market Trends 2008 Trends 2009 Trends 2010 Trends 2011† SMR 2011 SMR 2012
Individual/Conversion 9.9%* 10.8%* 11.7%* 8.6% 7.0% 7.1%
Small Group 11.2%* 11.2%* 8.8%* 6.7% 6.1% 4.8%*

† Trends data for 2011 are incomplete (see Methods section).

* Estimate is significantly different from 2011 at p < .05. (Trends values are compared to Trends 2011 and SMR values are compared to SMR 2011)

State-level premium increase estimates are reported in Table 15 for all states with reportable data included in this study and for six additional states included in the Trends report. With smaller sample sizes in individual states, one would expect that it would be more difficult to detect significant changes from year to year at the state level than at the national level. This expectation is reflected in our individual market state level results.34 Only four of 16 states with reportable data and no missing information in both 2011 and 2012 had statistically significant declines in rates of premium increase: Oklahoma, Oregon, Virginia, and Washington (Table 15). Four states with reportable data and no missing information – Colorado, Connecticut, Nevada, and Pennsylvania – had a statistically significant increase in premium rate growth. For the remaining eight states with reportable data, the change in premium rates between 2011 and 2012 was not statistically significant.

However, our individual market results also show that few states experienced consistently high premium rate increases. Among the 16 states with reportable data in 2011 and 2012, only Virginia had premium increases at double-digit rates in both years. Premiums increased at single-digit rates or below in 11 of 16 states in both years. Several states had particularly low premium increase rates. Among states with reportable data, North Carolina had premium rate increases of less than 5 percent in both 2011 and 2012.

Table 15: Premium Increases in Individual and Small Group Markets, by Year, and by State, Trends Study (2008-2011) and SMR Study (2011-2012)

  Individual/ Conversion Trends 2008 Individual/ Conversion Trends 2009 Individual/ Conversion Trends 2010 Individual/ Conversion Trends 2011† Individual/ Conversion SMR 2011 Individual/ Conversion SMR 2012   Small Group Trends 2008 Small Group Trends 2009 Small Group Trends 2010 Small Group Trends 2011† Small Group SMR 2011 Small Group SMR 2012
Mean US 9.9%* 10.8%* 11.7%* 8.6% 7.0% 7.1% Mean US 11.2%* 11.2%* 8.8%* 6.7% 6.1% 4.8%*
AL - 17.5%* 10.8%* 9.0% 7.7% 7.1% AL 9.0%* 8.9% 8.7%* 2.6% 3.9% N/R
AR N/R N/R N/R 7.2% 8.6% N/R AR - - - -    
CA - N/R 15.7%* 7.3% 8.6% 8.6% CA - N/R N/R 8.0% 7.0% 5.3%*
CO N/R N/R 16.4%* 10.9% 0.7% 10.1%* CO N/R 4.9%* 8.0%* 3.8% (1.3)% 6.4%*
CT - 20.1%* N/R 8.2% 1.6% 6.1%* CT N/R - 16.1%* N/R 3.2% 7.6%*
DC         N/R 3.0% DC         N/R 1.3%
DE         N/R N/R DE         N/R N/R
FL 8.2%* 8.9% 13.6%* 9.6% 7.2% 7.9% FL 17.7%* 13.3%* 11.6%* 5.0% 8.6% 7.9%*
HI - N/R - -     HI 8.7% N/R - N/R    
IA 2.8%* 7.3%* 18.4%* 10.1% 6.5% 7.1% IA N/R - - N/R N/R N/R
ID N/R 6.9% 3.0% N/R     ID N/R 2.8% N/R N/R    
IL 14.4% 10.4% 9.6% - N/R 7.3% IL - - - - (0.4)% 3.3%*
IN 13.5% 15.1% 8.2% N/R 5.3% 3.3% IN N/R 20.1%* (1.2)% 1.7%    
KS - N/R N/R - N/R 8.4% KS - N/R N/R N/R 2.6% 1.2%
KY 8.1%* 7.1%* 5.5%* 2.8% N/R 0.5% KY (0.4)%* 3.7%* 5.4% 6.1% (1.0)% 3.4%*
MA - - - -     MA - - - N/R    
MD N/R N/R N/R N/R     MD 1.6% 12.4% 0.7% -    
ME N/R 11.0%* 11.1%* 5.2% 5.2% 3.5% ME - N/R N/R 16.5% 9.9% 7.1%*
MI N/R N/R N/R N/R 11.0% N/R MI - - - - 8.9% 5.9%*
MN N/R 10.7%* 7.4% 7.3% - 2.6% MN N/R N/R 2.6% (0.3)% N/R (0.6)%
NC N/R N/R 11.6%* 5.2% 3.7% 3.7% NC 33.7% 9.8% 15.7% - 10.1% 6.4%*
NE - N/R 21.8%* 10.1% N/R 11.5% NE - - N/R N/R N/R N/R
NJ - 4.1%* 10.8%* 12.7% - 3.3% NJ 14.3% 18.8%* 20.6%* 14.5% N/R 4.7%
NV         (12.6)% 6.8%* NV         0.2% 2.5%*
NY         N/R 8.6% NY         15.5% 8.8%*
OH N/R N/R N/R N/R     OH - N/R 5.6%* (0.4)%    
OK N/R 8.2% 13.0%* 9.9% 10.0% 5.8%* OK - - - - N/R 1.0%
OR 12.2%* 15.2%* 14.9%* 9.0% 9.0% 6.2%* OR 4.7% 6.1% 12.7%* 6.0% 6.1% 4.2%*
PA N/R N/R 9.0%* 6.9% 4.5% 7.3%* PA N/R N/R N/R N/R - 1.4%
RI N/R N/R N/R - - N/R RI - - 1.3%* 11.6% - 4.0%
SD N/R 14.1% 16.2% -     SD - - - -    
TN         N/R 8.0% TN         (2.4)% (2.8)%
VA - 13.8% 8.9% - 14.1% 10.8%* VA - N/R 0.0% 0.3% 0.3% 2.7%*
WA N/R N/R 12.8%* 11.2% 12.3% 7.2%* WA - N/R 4.2% N/R 11.3% 3.0%*
WI 14.7%* 11.1% 14.0%* 11.8% 9.2% 10.5% WI - - - N/R N/R 3.7%*

† - Trends data from 2011 is incomplete (see Methods section).

Note: Some estimates are not reportable (N/R) because the proportion of state member months is less than 50%. The mean US figure is a weighted average.

The Trends study did not include DC, DE, NV, NY and TN in the state sample, so these cells are left blank for the Trends columns. This report does not include HI, ID, MA, MD, OH and SD in the state sample, so these cells are left blank for the SMR columns. Missing values for states included in the study are denoted with a dash.

* Estimate is significantly different from 2011 at p < .05. (Trends values are compared to Trends 2011 and SMR values are compared to SMR 2011)

We found that state level results in the small group market were similarly variable. In the small group market, eight of 16 states with reportable data and no missing values in both 2011 and 2012 had statistically significant declines in premium growth. These states were California, Florida, Maine, Michigan, North Carolina, New York, Oregon, and Washington. Six states had statistically significant increases in in premium rate growth. These states were Colorado, Connecticut, Illinois, Kentucky, Nevada, and Virginia. For the remaining two states –Kansas and Tennessee – the difference between the 2011 and 2012 premium growth rates was not significant (Table 15).

However, our results also show that no states experienced consistently high premium rate increases in the small group market. None of the included states had premiums increase at double-digit rates in both 2011 and 2012. Only three states – North Carolina, New York, and Washington – had double digit premium increase rates in one year, all in 2011. Six of the 16 states with reportable data in both study years had premium increases of less than 5 percent in both 2011 and 2012.


34 Two states – Arkansas and Indiana – were included in the individual market part of the study but not in the small group market part due to missing or incomplete data. Therefore, the total state sample size is 29 in the individual market but only 27 in the small group market. For state level analysis, the sample size is further reduced for two reasons. First, some states had missing data for a particular year. Second, we classified state-level data as not reportable (N/R) when the proportion of state member months in our data for that year is less than 50%. The mean US figure is a weighted average which includes data from all states in the sample, even those with non-reportable state-level estimates.

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