small group renewals analysis - feb 2013

7/28/2019 Small Group Renewals Analysis - Feb 2013

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Small Group Health Insurance Renewals by Geographic Area

Executive Summary

February 2013

The following charts reflect the range of increases in health insurance premiums received by small employers

from data provided by the carriers. The first chart compares 1st quarter data only from year to year, including

2011, 2012 and 2013. The second chart shows similar data as the first chart but includes 4th quarter data

grouped with 1st quarter data for better credibility. The final chart gives a geographic comparison for 1st quarter

2013 renewals. This information is intended to illustrate the immediate impact of PL 90 on small group healthpremiums. PL 90 allows geographic rate adjustments to be made without the previous limit on the combined

adjustments for age and area beginning with the October 2011 renewals. The 4th quarter of 2010 and the 1st,

2nd and 3rd quarters of 2011 are pre-PL 90 while the data from the 4th quarter of 2011 and subsequent are all

post-PL 90.

Rate increases also vary significantly among different groups for reasons unrelated to PL 90. Employerswhose circumstances change may see larger increases because of factors other than those associated with

their geographic area. For instance, if a business downsizes, a larger group size adjustment may apply. A

decrease from three to two employees can increase rates by 25% to 39% in addition to the normal increase.

If a younger employee is replaced by an older one or if one or more employees age into a higher age band,

the age factor will cause an increase.1 Two or more of these events can combine to result in significant rate

increases. Average base rate increases each quarter also vary for each carrier depending on the experience

of the business and expected trends. We have attempted to gauge the impact of PL 90 by tracking and

comparing the increases from quarter to quarter.


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Aggregate Number of Groups By Quarter in Each Rate Change Band

Size of rate increase:

< 0% (rate

decrease) 0-20% 20-40%40-60%

60-

80%

80-

100%

>

100%Total

1st Quarter 2011 112 1774 1126 146 44 18 11 3231

1st Quarter 2012 348 1911 709 221 61 20 11 3281

1st Quarter 2013 479 1543 884 142 39 18 3 3108

The percentage of rate decreases went up over the three 4th quarter comparison periods, from 3.5% in 2011 to 10.6% in

2012 and to 15.4% in 2013.

The total number of 1st quarter small group renewals remained similar from 2011 to 2012, but dropped by 173 groups

from 2012 to 2013 (3281 and 3108, respectively).

The 40-100% rate change bands all saw a slight increase from 2011 to 2012 followed by a slight decrease from 2012 to

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Maine Bureau of Insurance February 2013


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2013.

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100%

4th Q '10 & 1st Q '11 3.3% 55.0% 34.1% 5.0% 1.6% 0.7% 0.4%

4th Q '11 & 1st Q '12 10.2% 57.0% 22.8% 6.7% 2.2% 0.8% 0.3%

4th Q '12 & 1st Q '13 16.2% 51.0% 27.1% 4.0% 1.3% 0.4% 0.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

PercentageofGroups

Percentage of Groups By Quarter in Each RateChange Band

Aetna, HPHC, and Anthem Combined

Size of rate increase: 100% Total

4th Q '10 & 1st Q '11 168 2836 1759 259 82 34 21 51594th Q '11 & 1st Q '12 532 2985 1196 352 116 41 16 5238

4th Q '12 & 1st Q '13 772 2437 1294 191 61 19 4 4778

Aggregate Number of Groups By Quarter in Each Rate Change Band

The percentage of rate decreases went up over the three comparison periods (3.3%, 10.2% and 16.2%, respectively).

The total number of small group renewals remained similar from the 4th Q '10 & 1st Q '11 period to the 4th Q '11 & 1st Q '12

period, but dropped by 460 groups from the 4th Q '11 & 1st Q '12 period to the 4th Q '12 & 1st Q '13 period (5238 and 4778,

respectively).

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Counts by Geographic Area:

Size of rate

increase:

< 0% (rate

decrease) 0-20% 20-40%

40-60% 60-80% 80-100% > 100% Total

Central 81 293 138 25 4 2 0 543

East 46 214 182 21 8 6 1 478

North 27 144 183 28 4 2 0 388

South 300 815 344 65 22 7 2 1555

West 25 77 37 3 1 1 0 144

Totals 479 1543 884 142 39 18 3 3108

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Central

Androscoggin, Kennebec, Sagadahoc

East

Knox, Hancock, Lincoln, Waldo,

Washington

North

Aroostook, Penobscot,

Piscataquis

South

Cumberland,

York

West

Franklin, Oxford,

Somerset

small group renewals analysis - feb 2013

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