title: States with stronger health insurance rate review authority experienced lower premiums in the individual market in 2010-13.
abstract: States have varying degrees of review authority over health insurance carriers' rates, including prior approval authority over proposed rates and requirements for loss ratios, the proportion of premium revenues spent on medical claims. The Affordable Care Act (ACA) requires carriers in certain categories of health insurance to provide public justification for rate increases of 10 percent or more. We collected data on how states changed their rate review authority and requirements during 2010-13, the years immediately after enactment of the ACA, and we combined these data with carrier filings. We found that adjusted premiums in the individual market in states that had prior-approval authority combined with loss ratio requirements were lower in 2010-13 ($3,489) than premiums in states with no rate review authority or that had only file-and-use regulations, which gave the states no authority to block rate increases ($3,617). Adjusted premiums declined modestly in prior-approval states with loss ratio requirements, from $3,526 in 2010 to $3,452 in 2013, while premiums increased from $3,422 to $3,683 in states with no rate review authority or file-and-use regulations only. Our findings suggest that states with prior approval authority and loss ratio requirements constrained health insurance premium increases.
authors.affiliation: Pinar Karaca-Mandic (pkmandic@umn.edu) is an associate professor in the Division of Health Policy and Management, School of Public Health, at the University of Minnesota, in Minneapolis. She is also a research associate at the National Bureau of Economic Research, in Cambridge, Massachusetts.
authors.forename: Pinar
authors.initials: P
authors.lastname: Karaca-Mandic
authors.affiliation: Brent D. Fulton is an assistant adjunct professor and associate director of the Nicholas C. Petris Center on Health Care Markets and Consumer Welfare at the School of Public Health, University of California, Berkeley.
authors.forename: Brent D
authors.initials: BD
authors.lastname: Fulton
authors.affiliation: Ann Hollingshead was a master of public policy student at the Richard and Rhoda Goldman School of Public Policy, University of California, Berkeley, when this research was conducted. She plans to join the California Legislative Analyst's Office as a fiscal and policy analyst in August 2015.
authors.forename: Ann
authors.initials: A
authors.lastname: Hollingshead
authors.affiliation: Richard M. Scheffler is a distinguished professor at the School of Public Health and the Richard and Rhoda Goldman School of Public Policy, and director of the Nicholas C. Petris Center on Health Care Markets and Consumer Welfare at the School of Public Health, all at the University of California, Berkeley.
authors.forename: Richard M
authors.initials: RM
authors.lastname: Scheffler
mesh_terms: D005249:Fees and Charges / Q000331:legislation & jurisprudence*; D033161:Government Regulation; D006801:Humans; D007348:Insurance, Health / Q000191:economics* / Q000706:statistics & numerical data*; D058991:Patient Protection and Affordable Care Act / Q000331:legislation & jurisprudence; D011907:Rate Setting and Review / Q000331:legislation & jurisprudence*; D013219:State Government; D013997:Time Factors; D014481:United States
keywords: Health Reform