Trends in Premiums in the Small Group and Individual Insurance Markets, 2008-2011. Trends by Product Type

11/06/2012

The pattern of premium increases in the individual or small group market differed by product type. 27 In the individual market, PPO and indemnity plans saw double-digit rate increases for at least two of the four years in the sample (Figure 6). Cumulative increases in premiums from 2008-2011 were approximately 12 percentage points lower for HMO plans than for PPO or indemnity plans (Table 15).

Table 15: Cumulative Rate Increases, by Product Type, by Market

Characteristic Starting index=100 2008 increase 2009 increase 2010 increase 2011† increase Cumulative Increase
Individual/ conversion
HMO 100 6.9% 9.1% 9.8% 7.1% 137.2*
PPO/HDP 100 9.9 12.3 12.3 7.7 149.4
Indemnity 100 11.2 9.9 11.1 10.9 150.4
All plans 100 9.9% 10.8% 11.7% 8.6% 147.6
Small group
HMO 100 7.2 10.8 10.5 8.3 142.2
PPO/HDP 100 14.4 11.7 8.0 5.7 145.8
Indemnity 100 12.7 9.5 9.6 5.1 142.2
All plans 100 11.2% 11.2% 8.8% 6.7% 143.6

† Data from 2011 are incomplete.
* Estimate is significantly different from PPO/HDP at p < .05.


Figure 6: Rates of Premium Increase, by Year, by Product Type - Individual/Conversion

Figure 6: Rates of Premium Increase, by Year, by Product Type - Individual/Conversion

† Data for 2011 are incomplete.
* Estimate is significantly different from PPO/HDP at p < .05.


In the small group market, premium increases declined significantly from 2010 to 2011 for HMO and PPO plans (Figure 7). Premium increases in PPO and indemnity plans declined over all four years and premium increases in HMO plans declined from 2009 to 2011. Cumulative increases over the four-year study period were not significantly different between the plan types (see Table 15).

Figure 7: Rates of Premium Increase, by Year, by Product Type - Small Group

Figure 7: Rates of Premium Increase, by Year, by Product Type - Small Group

† Data for 2011 are incomplete.
* Estimate is significantly different from PPO/HDP at p < .05.


27 We believe that many plans that filed as indemnity plans are actually PPO plans with an indemnity license given that The Kaiser Family Foundation/Health Research and Educational Trust Employer Benefits Survey estimates indemnity market share in the employer-based market at 1 percent.

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