Based on information from 39 states from the individual market, the estimated national average rate increase implemented in the individual market in 2012 is approximately 12 percent lower than the increase originally requested by insurance companies. Based on 2012 individual market premium data for all states, this difference equates to about $311 million in savings to consumers. For the 39 states, 30.5 percent of total covered lives had rate change requests reduced or denied. Extrapolating to the total number of 11.1 million covered lives in the individual market, an estimated 3.4 million individuals had rate change requests reduced or denied.
Premium and covered lives data are based on the Medical Loss Ratio (MLR) annual reports4 for all 50 states and the District of Columbia, whereas the average increase in premiums is based on ASPE’s analysis of 38 states using Rate Review Grants (RRG) Program data, plus Florida, a non-grant state, using data available on Florida’s Office of Insurance Regulation website. Taking the average difference between rate changes requested and rate changes implemented, weighted by the number of covered lives, and multiplied by the estimated total U.S. premiums, this report extrapolates national savings estimates for consumers in the individual market resulting from rate review.5