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

11/06/2012

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:

  1. 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.
    1. 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.
    2. 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.
    3. 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.
  2. 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.

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