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).
The following sections review the structure of health insurance markets in the states and the changes that occurred in those markets between 1995 and 1997. These observations of the states’ group and individual markets underlie our subsequent analysis of regulatory impacts. A more detailed description of these markets is provided elsewhere (Chol
Most states restrict either the factors that insurers may consider in setting health insurance rates in either the small group or individual health insurance markets, and also the extent to which insurers can vary rates for allowable factors. HIPAA does not speak directly to the issue of rate setting in either statute or regulation, although many
The Impact of Access Regulation on Health Insurance Market Structure. B. Preexisting Condition Exclusions
At the time HIPAA was passed, 43 states limited the extent to which insurers could consider preexisting conditions in small-group plans; 45 states limited the length of time that insurers could exclude coverage for preexisting conditions in small-group plans (see Table 2). HIPAA limited the duration of preexisting conditions in small-group plans t
The Impact of Access Regulation on Health Insurance Market Structure. A. Guaranteed Issue And Renewal
At the time HIPAA was enacted in 1996, 35 states had enacted and implemented guaranteed issue in the small group market (see Table 1). In general, these states defined small groups as groups of 2 to 50 employees (as does HIPAA). Most (22 states) required guaranteed issue of only some products – typically a standard product devised by the state i
The Impact of Access Regulation on Health Insurance Market Structure. State Regulation of Health Insurance
At the time HIPAA was enacted, many of its provisions related to guaranteed issue and guaranteed renewal, preexisting condition exclusions and portability were already in place in at least some states. The following sections review state regulation of these features of both small-group and individual insurance plans.
All states have enacted health insurance reforms designed to improve access to health insurance among people with health problems. Even before implementation of the Health Insurance Portability and Accountability Act (HIPAA), many states already had required small-group insurers to guarantee issue and renewal. Many states also had portability requ
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 has no significant impact on overall coverage, but that regulation may change the r
by Deborah J. Chollet, Ph.D. Mathematica Policy Research Adele M. Kirk, M.A. University of California at Los Angeles Kosali Ilayperuma Simon, Ph.D. Michigan State University Submitted to
Variable Mean Std Deviation Min Max Individual Private Coverage Descriptive Statistics
Variable Mean Std Deviation Min Max Small Employer Coverage Descriptive Statistics
Author/Title Reforms considered Data and methods Findings Recent Empirical Studies of the Effects of State Health Insurance Reform Buchmueller, T.C. and G.A. Jensen (Fall 1997). “Small Group Reform in a Competitive Managed Care Market: The Case of California, 1993-1995.” Inquiry 34: 249-263.
Regression Results for Individual Private Coverage Dependent = Private (Individual) Coverage
Regression Results for Small Employer Coverage Firms with <25 workers Dependent = Any employer coverage
Model 1 Model 2 Model 3 Regression Results for Small Employer Coverage Firms with <100 workers Dependent = Any employer coverage
VARIABLE DEFINITIONS Group market characteristics G_NUMINS Number of insurers in the market G_TOPFIVE Share of business accounted for by top 5 firms (percent) G_HMO Share of business accounted for by HMOs G_COM Share of business accounted for by commercial companies G_COMLR Average commercial loss ratio