Community rating: Difference between revisions
→Occurrence: add Connecticut and Maryland age and gender discrimination prohibition/limits |
→Occurrence: note individual market guaranteed issue in Maine, Massachusetts, New Jersey, New York, Vermont |
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*[[Holland]] |
*[[Holland]] |
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*[[Republic of Ireland|Ireland]]<ref name="OECD"/> |
*[[Republic of Ireland|Ireland]]<ref name="OECD"/> |
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*within the [[United States of America|United States]]:<ref>{{cite web |author=[[Government Accountability Office|Government Accounting Office]] |date=September 30, 2003 |title=Private health insurance: Federal and state requirements affecting coverage offered by small businesses |publisher=Government Accounting Office |pages=41–43 |url=http://www.gao.gov/new.items/d031133.pdf}}<br />{{cite web |author=[[Georgetown Public Policy Institute|Georgetown Health Policy Institute]] |date=February 2009 |title=Individual market rate restrictions (not applicable to HIPAA eligible individuals), December 2008 |publisher=[[Kaiser Family Foundation]] |url=http://www.statehealthfacts.org/comparemaptable.jsp?ind=354&cat=7&sub=87&yr=63&typ=5}}<br />{{cite web |author=[[Georgetown Public Policy Institute|Georgetown Health Policy Institute]] |date=February 2009 |title=Small group health insurance market rate restrictions, January 2009 |publisher=[[Kaiser Family Foundation]] |url=http://www.statehealthfacts.org/comparemaptable.jsp?ind=351&cat=7&sub=86&yr=92&typ=5}}<br/>{{cite web |author=Codispoti, Lisa; Courtot, Brigette; Swedish, Jen |date=September 2008 |title=Nowhere to turn: How the individual health insurance market fails women |publisher=[[National Women's Law Center]] |url=http://nwlc.org/reformmatters/NWLCReport-NowhereToTurn-WEB.pdf }}<br />{{cite news |author=Lazar, Kay |date=April 26, 2009 |title=Prickly policies; Age-based pricing for health insurance has some consumers cutting back on coverage |work=[[The Boston Globe]] |page=1 (Business) |url=http://www.boston.com/business/healthcare/articles/2009/04/26/prickly_policies/?page=full}}<br />{{cite web |author=Appleby, Julie |date=August 31, 2009 |title=Health insurance: How much more should older people pay? |publisher=[[Kaiser Family Foundation|Kaiser Health News]] |url=http://www.kaiserhealthnews.org/Stories/2009/August/31/age-rating.aspx}}</ref> |
*within the [[United States of America|United States]]:<ref>{{cite web |author=[[Government Accountability Office|Government Accounting Office]] |date=September 30, 2003 |title=Private health insurance: Federal and state requirements affecting coverage offered by small businesses |publisher=Government Accounting Office |pages=41–43 |url=http://www.gao.gov/new.items/d031133.pdf}}<br />{{cite web |author=[[Georgetown Public Policy Institute|Georgetown Health Policy Institute]] |date=February 2009 |title=Individual market rate restrictions (not applicable to HIPAA eligible individuals), December 2008 |publisher=[[Kaiser Family Foundation]] |url=http://www.statehealthfacts.org/comparemaptable.jsp?ind=354&cat=7&sub=87&yr=63&typ=5}}<br />{{cite web |author=[[Georgetown Public Policy Institute|Georgetown Health Policy Institute]] |date=February 2009 |title=Individual market guaranteed issue (not applicable to HIPAA eligible individuals), December 2008 |publisher=[[Kaiser Family Foundation]] |url=http://www.statehealthfacts.org/comparemaptable.jsp?ind=353&cat=7&sub=87&yr=63&typ=5}}<br/>{{cite web |author=[[Georgetown Public Policy Institute|Georgetown Health Policy Institute]] |date=February 2009 |title=Small group health insurance market rate restrictions, January 2009 |publisher=[[Kaiser Family Foundation]] |url=http://www.statehealthfacts.org/comparemaptable.jsp?ind=351&cat=7&sub=86&yr=92&typ=5}}<br/>{{cite web |author=Codispoti, Lisa; Courtot, Brigette; Swedish, Jen |date=September 2008 |title=Nowhere to turn: How the individual health insurance market fails women |publisher=[[National Women's Law Center]] |url=http://nwlc.org/reformmatters/NWLCReport-NowhereToTurn-WEB.pdf }}<br />{{cite news |author=Lazar, Kay |date=April 26, 2009 |title=Prickly policies; Age-based pricing for health insurance has some consumers cutting back on coverage |work=[[The Boston Globe]] |page=1 (Business) |url=http://www.boston.com/business/healthcare/articles/2009/04/26/prickly_policies/?page=full}}<br />{{cite web |author=Appleby, Julie |date=August 31, 2009 |title=Health insurance: How much more should older people pay? |publisher=[[Kaiser Family Foundation|Kaiser Health News]] |url=http://www.kaiserhealthnews.org/Stories/2009/August/31/age-rating.aspx}}</ref> |
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**Small group (2 to 50 employees) heatlh insurance market only: |
**Small group (2 to 50 employees) heatlh insurance market only: |
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***[[Colorado]] — age discrimination ''unlimited''; gender discrimination ''illegal'' |
***[[Colorado]] — age discrimination ''unlimited''; gender discrimination ''illegal'' |
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***[[Rhode Island]] — age and gender discrimination combined ''limited'' to 400 percent; health status discrimination ''limited'' to ± 10% of community rating |
***[[Rhode Island]] — age and gender discrimination combined ''limited'' to 400 percent; health status discrimination ''limited'' to ± 10% of community rating |
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**Individual and small group health insurance markets: |
**Individual and small group health insurance markets: |
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***[[Maine]] — age discrimination ''limited'' to 150 percent; gender discrimination ''illegal'' |
***[[Maine]] — age discrimination ''limited'' to 150 percent; gender discrimination ''illegal''; individual guaranteed issue |
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***[[Massachusetts]] — age discrimination ''limited'' to 200 percent; gender discrimination ''illegal'' |
***[[Massachusetts]] — age discrimination ''limited'' to 200 percent; gender discrimination ''illegal''; individual guaranteed issue |
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***[[New Hampshire]] — age discrimination ''limited'' to 400 percent; gender discrimination ''illegal'' |
***[[New Hampshire]] — age discrimination ''limited'' to 400 percent; gender discrimination ''illegal'' |
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***[[New Jersey]] — age and gender discrimination combined ''limited'' to 350 percent |
***[[New Jersey]] — age and gender discrimination combined ''limited'' to 350 percent; individual guaranteed issue |
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***[[New York]] — age and gender discrimination ''illegal'' = <u>pure</u> community rating |
***[[New York]] — age and gender discrimination ''illegal'' = <u>pure</u> community rating; individual guaranteed issue |
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***[[Oregon]] — age discrimination ''limited ''to 200 percent; gender discrimination ''illegal'' |
***[[Oregon]] — age discrimination ''limited ''to 200 percent; gender discrimination ''illegal'' |
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***[[Vermont]] — age and gender discrimination combined ''limited'' to 150 percent |
***[[Vermont]] — age and gender discrimination combined ''limited'' to 150 percent; individual guaranteed issue |
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***[[Washington]] — age discrimination ''limited'' to 350 percent; gender discrimination ''illegal'' |
***[[Washington]] — age discrimination ''limited'' to 350 percent; gender discrimination ''illegal'' |
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Revision as of 03:49, 21 September 2009
Community rating is a concept usually associated with health insurance, which requires health insurance providers to offer health insurance policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status.
Pure community rating prohibits insurance rate variations based on demographic characteristics such as age or gender, whereas adjusted or modified community rating allows insurance rate variations based on demographic characteristics such as age or gender.
Concept
Community rating, as a basis for premium calculation, is fundamentally different from the usual method of determining insurance premiums, i.e. risk rating. In a risk rated insurance market, an insurer calculates the premium payable by a potential policy holder in order to enter into an insurance contract on the basis of various factors particular to that individual, such as the risk of a claims occurring, and the value of any such a claims during the term of an insurance policy. In a community rated market, the insurer may not calculate premium on the basis of the risk factors attaching to the particular person wishing to effect an insurance contract, but rather the risk factors applying to all persons within the market as a whole. Thus, in a community rated market, the insurer evaluates the risk factors of market population, and not those of any one person when calculating premiums.[1]
Practical effect
In practical terms, community rating occurs most often occurs in regard to the determination of health insurance premiums, but is also used in determining premiums for flood insurance, and potentially any other type of insurance. In regard to health insurance it results in providers not evaluating health-related factors such as a potential policy holder's state of health, but rather the state of health of everyone within the market. A health insurer will not evaluate the age, sex, or health status of a policy holder, but rather that of the market or population as a whole, and therefore will charge the same premium to all persons within that market or population for any one health insurance plan.
Where a health insurer charges the same premium for any one health insurance plan, regardless of health status, age, or gender, this is commonly referred to as a "pure" community rated system. Where an insurer may vary premiums based on demographic characteristic such as age or gender, but not based on health status, this is referred to as an "adjusted" or "modified" community rated system.
Since community rating is a disincentive for profit-motivated insurers, it is usually mandated by government in systems in which it exists by force of law, with risk-rated health insurance prohibited.
A concept of "open enrollment" often accompanies community rating where it exists in order to ensure health insurance providers extend coverage to all those who seek insurance and do not simple refuse to cover sick or "high risk" individuals. Some form of risk equalization also often exists in a community rated system.
Occurrence
A system of pure or modified community rating is used by law in the determination of health insurance premiums in a number of jurisdictions, including:
- Australia[2]
- Holland
- Ireland[2]
- within the United States:[3]
- Small group (2 to 50 employees) heatlh insurance market only:
- Colorado — age discrimination unlimited; gender discrimination illegal
- Connecticut — age and gender discrimination unlimited
- Maryland — age discrimination limited to 280 percent; gender discrimination illegal
- Rhode Island — age and gender discrimination combined limited to 400 percent; health status discrimination limited to ± 10% of community rating
- Individual and small group health insurance markets:
- Maine — age discrimination limited to 150 percent; gender discrimination illegal; individual guaranteed issue
- Massachusetts — age discrimination limited to 200 percent; gender discrimination illegal; individual guaranteed issue
- New Hampshire — age discrimination limited to 400 percent; gender discrimination illegal
- New Jersey — age and gender discrimination combined limited to 350 percent; individual guaranteed issue
- New York — age and gender discrimination illegal = pure community rating; individual guaranteed issue
- Oregon — age discrimination limited to 200 percent; gender discrimination illegal
- Vermont — age and gender discrimination combined limited to 150 percent; individual guaranteed issue
- Washington — age discrimination limited to 350 percent; gender discrimination illegal
- Small group (2 to 50 employees) heatlh insurance market only:
References
- ^ Neuhaus, Walther (November 1995). "Community rating and equalisation" (PDF). ASTIN Bulletin. 25 (2): 95–118.
- ^ a b Organisation for Economic Co-operation and Development (November 25, 2004). Private health insurance in OECD countries. Paris: OECD. p. 78. ISBN 9264006680.
- ^ Government Accounting Office (September 30, 2003). "Private health insurance: Federal and state requirements affecting coverage offered by small businesses" (PDF). Government Accounting Office. pp. 41–43.
Georgetown Health Policy Institute (February 2009). "Individual market rate restrictions (not applicable to HIPAA eligible individuals), December 2008". Kaiser Family Foundation.{{cite web}}:|author=has generic name (help)
Georgetown Health Policy Institute (February 2009). "Individual market guaranteed issue (not applicable to HIPAA eligible individuals), December 2008". Kaiser Family Foundation.{{cite web}}:|author=has generic name (help)
Georgetown Health Policy Institute (February 2009). "Small group health insurance market rate restrictions, January 2009". Kaiser Family Foundation.{{cite web}}:|author=has generic name (help)
Codispoti, Lisa; Courtot, Brigette; Swedish, Jen (September 2008). "Nowhere to turn: How the individual health insurance market fails women" (PDF). National Women's Law Center.{{cite web}}: CS1 maint: multiple names: authors list (link)
Lazar, Kay (April 26, 2009). "Prickly policies; Age-based pricing for health insurance has some consumers cutting back on coverage". The Boston Globe. p. 1 (Business).
Appleby, Julie (August 31, 2009). "Health insurance: How much more should older people pay?". Kaiser Health News.