Estimated Reduction in Premiums: For these 37 states, 20.5 percent of total covered lives were in policies that had rate change requests reduced or denied. We used this percentage to make an estimate for all 50 states and the District of Columbia by applying it to 2013 MLR data for covered lives in the small group market in all 51 jurisdictions. The MLR data for the 2013 small group market shows 17.3 million covered lives and $78.2 total premiums. Of the 17.3 million covered lives in the small group market nationwide, 20.5 percent, or an estimated 3.6 million covered lives, had rate change requests reduced or denied. Based on 2013 MLR data for total small group market premiums in all states, rate review resulted in a reduction in total premiums of approximately $703 million. We calculated this estimated 11 percent reduction by multiplying the difference between the rate increase initially requested (8.0 percent) and the rate increase implemented (7.1 percent) by the total 2013 premiums of $78.2 billion.9
Requested Rate Increases of 10 Percent or More: Compared to the individual market, a smaller share of small group rate filings requested rate increases of 10 percent or more in 2013 (20.7 percent of small group rate filings compared to 25 percent of individual market rate filings). Overall, 18.1 percent of small group rate filings and 23.3 percent of small group covered lives experienced an implemented rate increase of 10 percent or more. Approximately one-fifth (20.5 percent) of total covered lives in small group policies had a rate change request reduced or denied through rate review in the small group market. Table 2 summarizes the results for the small group insurance market.
Table 2: Rate Change Requested Versus Rate Change Implemented in the Small Group Market (Based on Analysis of 37 States)
|Small Group Market Rate Change, 2013||Requested||Implemented10|
|Number of rate filings in 37 states||1,099||1,099|
|Filings with rate change requested ≥10% for 37 states (%)||20.7%||18.1%|
|Average rate change:|
|For 37 states||8.0%||7.1%|
|When request ≥10% for 37 states||14.4%||11.6%|
Number of covered lives affected by these rate filings
Covered lives with rate change requested≥10% for 37 states (%)
Covered lives with rate change request reduced or denied (%)
Total covered lives with rate request change reduced or denied based on 17.3 million total covered lives in the small group market for all states
|Total U.S. estimated reduction in premiums based on $78.2 billion total premiums in the small group market for all states||$703 million|
|Sources: Revised State Rate Review Grant (RRG) data and data from state websites11|
9 This estimate uses information submitted by 36 states through the Rate Review Grant Program and/or grantee state websites, plus state website data from Florida, a non-grantee state, and is based on the average difference between rate changes requested and rate changes implemented, weighted by the number of covered lives. RRG Program data were supplemented by state website data whenever such data was publicly available. Eight states submitted limited RRG Program data in the small group market and were therefore not included in the analysis. As with the individual market analysis, the small group estimates includes data from the reporting states on all rate increases, even those below 10 percent, in the small group market and assumes that the difference will be similar in the states that did not report data.