Healthcare Marketplace

The Impact of Access Regulation on Health Insurance Market Structure. Table 3: Number of States with Health Rate Bands in Effect, 1995-1999

1995 1996 1997 1998 1999 Small Group Market Prohibited 9 10 11 13 13 1.1-1.9:1 28 28 28 25 27

The Impact of Access Regulation on Health Insurance Market Structure. Table 2: Limits on Preexisting Condition Exclusions, 1995-1999

Small Group Market Individual Market 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 Maximum look back period (Number of months)

The Impact of Access Regulation on Health Insurance Market Structure. Table 1: Number of States Requiring Guaranteed Issue or Renewal

Small Group Market Law Implemented 1995 1996 1997 1998 1999 Guaranteed Issued All Products 11 13 14 50 50 Guaranteed Issue Some Products 18 22 23 0 0 Guaranteed Renewal 43

The Impact of Access Regulation on Health Insurance Market Structure. List of Tables

The Impact of Access Regulation on Health Insurance Market Structure. Market Knowledge by State

The proportion of the group and individual markets in each state that is “known” after compiling data from each of the sources of information described above is listed in Table A2. The proportion of the market that is known is measured as the major medical premiums earned in the state by all of the health insurers about which we have informati

The Impact of Access Regulation on Health Insurance Market Structure. Health Maintenance Organizations

Alpha Center obtained photocopies of every HMO filing in 1995, and coded and entered selected fields from these filings into an electronic database. To obtain 1996 and 1997 information, we purchased from InterStudy its standard HMO financial database for 1996 and 1997, enhanced with selected additional premium and medical loss figures by line of b

The Impact of Access Regulation on Health Insurance Market Structure. Blue Cross and Blue Shield Plans

Alpha Center obtained copies of the annual statement of all companies filing as a Hospital, Medical, Dental or Indemnity (HMDI) carrier in 1995, 1996 or 1997. For some states, these were obtainable from NAIC; we contacted other states directly to obtain statements. These statements provide information about every Blue Cross and Blue Shield (BCBS)

The Impact of Access Regulation on Health Insurance Market Structure. Commercial insurers

The NAIC data. Our basic source of information about commercial insurers is the annual financial reports that each admitted insurer files in each state, compiled by the National Association of Insurance Commissioners (NAIC). In all states, each commercial insurer files an extensive set of forms with the state, submitting information on premiums

The Impact of Access Regulation on Health Insurance Market Structure. Appendix A: the Health Insurer Database

The Health Insurer Database was compiled by Alpha Center with grant funding from the Robert Wood Johnson Foundation. The Health Insurer Database contains information about every health insurer in the U.S. that wrote at least $500,000 of major medical insurance coverage in any state in 1995, 1996 or 1997. Much of the database was compiled from publ

The Impact of Access Regulation on Health Insurance Market Structure. References

Blair, R.D., and J.R.Vogel, “A Survivor Analysis of Commercial Health Insurers,” Journal of Business 50, 521-9, 1978. Blue Cross and Blue Shield Association, “State Legislative Health Care and Insurance Issues: Survey of Plans,” 1995-1999. Brown, M.J., and E.W. Frees, “Prohibitions on Health Insurance Underwriting: A Means of Mak

The Impact of Access Regulation on Health Insurance Market Structure. Endnotes

1 - In lieu of requiring waiting periods for coverage of preexisting health problems, insurers may exclude coverage for selected conditions altogether. Permanent exclusions of coverage for specific health conditions are called exclusion riders; for other conditions, the insured group or individual coverage has full coverage under the terms of the

The Impact of Access Regulation on Health Insurance Market Structure. Summary and Conclusions

Recent studies of health insurance regulation all have concluded that state regulation of insurance issue, renewal and rating in general either reduces health insurance coverage or, on net, has no impact on coverage. Some of these studies have found that regulation may change the risk distribution of the insured population, raising coverage among

The Impact of Access Regulation on Health Insurance Market Structure. B. Individual Market Effects of Regulation

Guaranteed issue. Federal law does not require guaranteed issue in the individual market, as it does in the group market. As a result, only 7 states had all-product guaranteed issue in any year between 1995 and 1997, and only 5 states required guaranteed issue of some products. Neither of these provisions had a significant impact on the number o

The Impact of Access Regulation on Health Insurance Market Structure. A. Group Market Effects of Regulation

The following sections describe our results with respect to three areas of regulation: guaranteed issue and renewal, limits on preexisting condition exclusions, and limits on rating.

The Impact of Access Regulation on Health Insurance Market Structure. Results

The results of our analysis suggest that state insurance regulation has some impacts on health insurance markets. However, these effects differ in size and direction in the group and individual markets when the analysis controls for other circumstances, and they often have only weak statistical significance (90 percent). Moreover, our analysis ind

The Impact of Access Regulation on Health Insurance Market Structure. B. Measures of regulation

In preparing a regulation database from published sources, we discovered that recognizes sources of information about insurance regulation (Institute for Health Policy Solutions, 1999; Health Policy Tracking Service, 1996-1998; and Blue Cross and Blue Shield Association, 1996-99) occasionally disagree. With funding from the Robert Wood Johnson Fou

The Impact of Access Regulation on Health Insurance Market Structure. A. Insurer Response to Regulation

The types of regulation that states have imposed in the small group market, and to a lesser extent in the individual market, reward greater insurer size, especially if insurers already are operating with increasing economies of scale. 5 In general, one would expect that regulation which reduces insurers’ ability to deny risk or to rate risk app

The Impact of Access Regulation on Health Insurance Market Structure. Research Design and Methods

Without exception, the empirical research literature investigating the structure of health insurance markets has investigated only the HMO market (Paul and Chollet, 1997). In part because this literature fails to consider the other sectors of the market, and in part because it fails to consider the types of regulation of interest in this paper, it

The Impact of Access Regulation on Health Insurance Market Structure. B. Individual Health Insurance Markets

The individual health insurance market is much smaller than the group market, both in terms of the dollar volume of premiums earned and the number of insurers writing business. In 1997, insurers wrote $8.2 billion in earned premiums in the individual market – less than 6 percent of the volume of business that insurers wrote in the group market.

The Impact of Access Regulation on Health Insurance Market Structure. A. Group Health Insurance Markets

Group major medical insurers in the US – including commercial insurance, Blue Cross and Blue Shield plans, and HMOs – wrote approximately $145 billion in earned premiums in 1997. HMOs wrote nearly 45 percent of this business, followed by Blue Cross and Blue Shield plans (36 percent) and commercial insurers (19 percent).

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