The Impact of Access Regulation on Health Insurance Market Structure

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

the Office of the Assistant Secretary for Planning and Evaluation
US Department of Health and Human Services
in partial fulfillment of Contract HHS-10098-0014.

October 20, 2000

This research was conducted with partial funding from the Robert Wood Johnson Foundation to the Academy for Health Services Research and Health Policy.

TABLE OF CONTENTS

Executive Summary
 
Introduction
 
State Regulation of Health Insurance
Guaranteed issue and renewal
Preexisting condition exclusions
Rate limits
 
Market Structure
Group health insurance markets
Individual health insurance markets
 
Research Design and Methods
Insurer response to regulation
Measures of regulation
 
Results
Group market effects of regulation
Individual market effects of regulation
 
Summary and Conclusions
 
References
 
Appendix: The Health Insurer Database
Commercial insurers
Blue Cross and Blue Shield Plans
Health Maintenance Organizations
Market Knowledge by State
 
List of Tables
 
Table 1
Number of States Requiring Guaranteed Issue or Renewal
 
Table 2
Limits on Preexisting Condition Exclusions, 1995-1999
 
Table 3
Number of States with Health Rate Bands in Effect, 1995-1999
 
Table 4
Number of States with Age Rate Bands in Effect, 1995-1999
 
Table 5
Number of States with Composite Rate Bands in Effect, 1995-1999
 
Table 6
Number of Insurers Writing Group Major Medical Insurance and Percent of Market Held by Type of Insurer, 1995-1997
 
Table 7
Number of Insurers Writing Individual Major Medical Insurance and Percent of Market Held by Type of Insurer, 1995-1997
 
Table 8
Variable Definitions: Group and Individual Markets
 
Table 9
Descriptive Statistics: Group Market, 1995-1997
 
Table 10
Descriptive Statistics:Individual Market, 1995-1997
 
Table 11
Estimated Coefficients and Standard Errors: Group Market
 
Table 12
Estimated Coefficients and Standard Errors: Individual Market
 
Table A1
Number and Rate of Response to the Alpha Center Health Insurer Survey by Market
 
Table A2
Percent of Group and Individual Major Medical Markets Known from the Alpha Center Survey of Commercial Insurers and Standard Filings
 
List of Figures
 
Figure 1
Number of Insurers and Insurers per Population: Group Market, 1997
 
Figure 2
Market Share by Insurer Type: Group Market, 1997
 
Figure 3
Number of Insurers and Insurers per Population: Group Market, 1997
 
Figure 4
Number of Insurers and Insurers per Population: Individual Market, 1997
 
Figure 5
Number of Insurers in the Group and Individual Market by State, 1997