Trends in Premiums in the Small Group and Individual Insurance Markets, 2008-2011

Data on premium increases were collected from 2008-2011 hard copy rate filings submitted by insurance carriers and from rate filings or rate summaries available on state insurance websites for the small group and individual insurance markets. In the individual market, the average premium increase (weighted by member months) was 9.9 percent in 2008, 10.8 percent in 2009, and 11.7 percent in 2010, and then declined to 8.6 percent in 2011. In the small group market, average premium increases declined throughout the study period, from 11.2 percent in 2008 and 2009 to 8.8 percent in 2010 and 6.7 percent in 2011. There was substantial variability across states in the average rate of increase. In addition to having their rate requests accepted or rejected, carriers could reach some compromise with the state for a modified rate. The percentage of requests modified by states increased between 2008 and 2011 in both markets. The Affordable Care Act provides states with rate review grants to help states implement or improve their review rate process. These improvements also resulted in increased transparency with 23 states initiating public websites in 2010 and 2011 displaying rate filing information.