To build a national database, NORC attempted to collect rate filings submitted by issuers of comprehensive major medical insurance products to state regulators from 2008 to 2011.15 As noted above, to our knowledge, this is the first study that attempts to build a national database of carrier rate filings. As a result, NORC and its subcontractor, NovaRest, an actuarial consulting firm, began the project with assumptions about data quality and completeness and the general feasibility of the data collection effort that turned out to be incorrect.
One incorrect assumption was that carriers filed rate increases with state insurance departments each year in all states in which they conducted business. In reality, however, some states did not require filings or required filings only for certain products. In these states, many insurers did not file. In addition, the NORC team had assumed that filings would be retained over time, and that states would provide access to filings, would not charge high fees to access them, and would not consider filings proprietary information (i.e., containing confidential business information and therefore not publicly available). Finally, we assumed that rate filings would generally include accurate information on product enrollment, MLRs, and the approval or non-approval decision.
NORC’s proposal to ASPE designated Perr & Knight to collect filings by sending its staff to state insurance departments to obtain PDF documents for sampled carrier rate filings for the years 2008-2011. Perr & Knight collects such documents in the property and casualty insurance business for individual carriers as its core business. These carriers contract with Perr & Knight to gather market intelligence on their competitors. As it turns out, Perr & Knight had far less experience in the health insurance market, and was largely unaware of the quality and quantity of health insurance filings at insurance departments.
By spring 2011, it was apparent that many of NORC’s assumptions were wrong. Rather than the estimated 5,000 filings planned for in the proposal, Perr & Knight had gathered 734 filings usable for this project. They also delivered thousands of filings for large group coverage, Medicare Advantage plans, new products, and form filings, all of which fall outside the scope of this project. The following reviews each of the initial assumptions that proved to be erroneous:
- States receive rate filings for all increases to small group and individual market comprehensive major medical products each year – Some states have no requirements that carriers file for rate increases, particularly in the small group market. Prior to the Affordable Care Act, for instance, Illinois and California had no filing requirement in the small group market.16 Some states, such as Michigan and Hawaii, required only HMOs to file.
- State insurance departments retain filings – Most filings in 2008 and 2009 were paper documents. Some states purged their files after a few years. For example, Indiana retains its paper filings for one year. Kansas purges all foreign carriers after one year. In other states, older filings were stored off-site and de facto unavailable to the public. Also, some filings were even missing from states in which the insurance department had prior approval authority.
- States would provide access to files – Some states, such as Tennessee and South Carolina, charge high fees to copy files, thereby rendering their filings essentially inaccessible.17 Mississippi and Massachusetts did not respond to phone calls from Perr & Knight or NORC. See Table 1 for further details.
- States would not consider filings proprietary – Texas regards all rate filings as proprietary business information and thus restricts public access to them. To view filings, one must write to each carrier and request a copy. Carriers have no obligation to provide the document. Connecticut and Maryland still have laws designating filings proprietary and New York only very recently removed this type of proprietary protection.
- Rate filings would include accurate information on premium increases, product enrollment, MLRs, and the approval or non-approval decision – Some rate filing forms had no information on rate increases. Information on product enrollment was sometimes missing or more commonly of poor quality (for example, listing identical enrollment for all plans offered by the carrier). Overall, MLR information was available for only 40.3 percent of filings in the individual market and 36.5 percent in the small group market.
Table 1: Availability of Rate Filings by State, for States Investigated
|State||Filing Requirements, Individual Market||Filing Requirements, Small Group Market||Are Filings Proprietary?||Public Website Available as of 7/2012||Public Website Prior to ACA Grant|
|Alabama||Informational, except HMO||Informational||Yes, until recently||Yes||No|
|Arkansas||Prior approval||No requirement||No||Yes||Rate filings|
|California||File and use||File and use||No||Yes||No|
|Colorado||Prior approval began in 2009||Prior approval began in 2009||No||Yes||Summary information online|
|Connecticut||Prior approval||Prior approval||Yes||Yes||Some rate filings|
|Florida||Prior approval||Prior approval||No||Yes||Rate summary and filings|
|Hawaii||Prior approval||Prior approval||No||No||No|
|Illinois||File with form||File and use||No||Rate summary with limited information, through 12/2010||No|
|Iowa||Prior approval||Prior approval||No||No||No|
|Indiana||Prior approval||File and use||No||Yes||No|
|Idaho||File and use||File and use||No||No||No|
|Kansas||File and use||File and use||No||Yes||No|
|Kentucky||File and use||File and use||No||Yes||No|
|Massachusetts||Prior approval||No requirement||No||No||No|
|Maine||File and use (unless insurer doesn’t reach MLR standards)||File and use||No||Rate summary and some rate filings||Yes|
|Maryland||Prior approval||Prior approval||Yes||No||No|
|Michigan||HMO and BCBS prior approval||HMO and BCBS prior approval||No||Yes, with limited information||Yes, with limited information|
|Minnesota||Prior approval||Prior approval||Yes||Yes||No|
|Mississippi||Informational||Informational||"For review only"||No||No|
|New Jersey||Prior approval||No requirement||No||No||No|
|North Carolina||Prior approval||Prior approval||No||Yes||“Free of confidential information”|
|Nebraska||File and use||File with form||No||Yes||No|
|New York||Prior approval since 2010||Prior approval since 2010||Became public in 2012||Rate summary with limited information||Limited to premium increases|
|Ohio||Prior approval||Prior approval||No||No||No|
|Oklahoma||File with form||File with form||No||Yes||No|
|Oregon||Prior approval||Prior approval||No||Yes||Rate summary|
|Pennsylvania||Prior approval||Prior approval||No||Yes||Notice of most rate increases and rate filings|
|Rhode Island||Prior approval||Prior approval||No||Yes||Yes|
|South Carolina||Prior approval||No requirement||No||No||No|
|South Dakota||File and use||No requirement||No||No||No|
|Texas||File and use||File and use||Yes||No||No|
|Tennessee||Prior approval||Prior approval||No||No||Post rate changes|
|Virginia||Prior approval||Informational||No||Yes||Published proposed rates|
|Washington||Prior approval||Prior approval||No||Yes||No|
|Wisconsin||File and use||File and use||No||Yes||Yes|
Note: Only states in either the original or final sample are listed (see Table 3).
Sources: Public website prior to ACA is based on “Health Insurance Premium Grants: Detailed State by State Summary of Proposed Activities,” http://www.healthcare.gov/news/factsheets/2010/08/rateschart.html; filing requirements based on that source, “Private Health Insurance Premiums and Rate Reviews,” published by the Congressional Research Service, http://healthreform.kff.org/~/media/Files/KHS/docfinder/crs_1112011priva..., as well as other sources.
Together, these erroneous assumptions constitute an important barrier to data availability and quality. To address the study objectives, NORC revised its original methodology. First, we excluded from the analysis Texas, Tennessee, South Carolina, Mississippi, and New York, and added Arkansas, Nebraska, Kentucky, Oklahoma, and Maine. In replacing some states, we substituted states with similar member counts and MLR requirements when possible.
NovaRest and NORC collected data from some states where Perr & Knight had little success. In New Jersey and Minnesota, NovaRest used its personal contacts to obtain information from the state insurance department. In Maryland, with the pledges of confidentiality and privacy, NORC was able to persuade the insurance department to provide rate filings. Although there were multiple sources, public websites represent the largest single source of filings that were included in the national database.Many filings were available for the first time during 2011. States added new filings to these sites intermittently throughout 2011, and NovaRest and NORC revisited these websites on multiple occasions. In addition to rate filings, some states provided summaries of premium increase requests online for a specific period of time. These state summaries included much of the same information included in the filings themselves, but in a different format. Further information on the data made publicly available through state insurance department websites is included in Table 2.
Table 2: Status and Content of State Websites Available, as of July, 2012
|State||In Final Sample||Content on Website|
|Alabama||Yes||Rate filings, starting from June 10, 2010.|
|Arkansas||Yes||Rate filings, starting from March 21, 2008.|
|California||Yes||Rate filings from non-HMO plans, starting from mid-2010.|
|Colorado||Yes||Rate summary, starting from January 1, 2008. Rate filings, starting from 2008.|
|Connecticut||Yes||Rate filings, starting from September 2010.|
|District of Columbia||No||Rate filings, starting from the middle of 2010.|
|Delaware||No||Rate summary, starting from the middle of 2010. Rate filings, starting from September 2011.|
|Florida||Yes||Rate summary, starting from 2008 or before. Rate filings by request.|
|Illinois||Yes||Rate summary, excluding enrollment, through 2010.|
|Iowa||Yes||Rate summary, no longer available online.|
|Indiana||Yes||Rate summary, excluding enrollment, for part of 2010. Rate filings starting from May 2010.|
|Kansas||Yes||Rate filings starting from mid-2010.|
|Kentucky||Yes||Rate filings starting from mid-2010.|
|Maine||Yes||Summary of rate increases and MLRs by market. Rate filings starting from June 2010.|
|Michigan||Yes||Filings, mostly form filings rather than rate filings, starting from August 2001.|
|Minnesota||Yes||Most, but not all, rate filings, starting from June 10, 2010.|
|Nebraska||Yes||Rate summary, excluding enrollment. Rate filings starting from April 2011.|
|North Carolina||Yes||Rate filings, starting from January 2000.|
|North Dakota||No||Rate summary, excluding enrollment, for Blue Cross Blue Shield of North Dakota starting from 2001.|
|New Jersey||Yes||Rate filings, starting from 2012.|
|New Mexico||No||Rate summary, starting from January 2011, including 2012 filings. online.|
|Nevada||No||Rate filings starting from August 2010.|
|New York||No||Rate increases, excluding enrollment, starting from July 2010.|
|Oklahoma||Yes||Rate filings starting from June 2010.|
|Oregon||Yes||Rate filings and rate summaries, starting from 2008.|
|Pennsylvania||Yes||Rate filings and rate summaries, starting from 2004, although summaries may be more complete than filings.|
|Rhode Island||Yes||Rate filings and rate summaries, starting from 2010, but may be incomplete.|
|South Carolina||No||Rate increases, including enrollment, starting from 2012.|
|Tennessee||No||Rate filings, starting from June 2010. Rate summaries, excluding enrollment, starting from 2007.|
|Vermont||No||Rate filings starting from January 2012.|
|Virginia||Yes||Most, but not all, rate filings, starting from June 10, 2010.|
|Washington||Yes||Rate filings starting from July 2011. Some additional rate filings from 2010-2011.|
|Wisconsin||Yes||Rate filings starting from 2001|
Note: Only states with publicly available websites are listed. State website URLs for states in the final sample are provided in Appendix A.
NORC also altered the sampling approach based on the accessibility of the data (see the section on sample selection below). The original sample called for a proportional stratified random sample within the states. Strata were defined by earned premiums relative to other carriers in the state. The approach to selecting states was altered to accommodate replacements for states where NORC could not access data from websites or through other means.
NORC also altered the planned strategy for within-state selection of the carriers whose filings would be used for analysis. The new strategy for sampling carriers within the states called for using rate filings from both a sample of carriers and all of the filings available from the five largest carriers in the state.
15 Comprehensive insurance products aim to protect beneficiaries from the cost of medical, surgical and hospital care. Comprehensive coverage is distinguished from other coverage that may provide coverage for a single type of service. Examples of the latter include hospital indemnity coverage or dental coverage. Other coverage may protect consumers against dread diseases only such as cancer policies. Comprehensive products usually have copayments, coinsurance, and sometimes deductibles, and cover a wide range of acute and chronic conditions. See http://en.wikipedia.org/wiki/Health_insurance.
16 In 2011, California’s Department of Managed Care began requiring carriers to file rates in the small group market.
17 South Carolina charges fees for obtaining copies of filings (which depend on media: $1 per copied page, $5 per megabyte of emailed document, or $45 per batch download onto a USB drive), as well as a $50 per-filing charge for any file that must be retrieved from their archives. Tennessee’s statute allows regulators some discretion in assessing fees, and offers free public access to filings submitted after June 10, 2010, but it is likely that a request for all filings submitted from 2008 through that date would have a significant impact on the cost of data collection.