Subsidizing the Sick: How Community Rating Works

Clin Spine Surg. 2017 Dec;30(10):457-458. doi: 10.1097/BSD.0000000000000557.

Abstract

Insurance premium rates have typically been calculated using a variety of rating algorithms. Passage of the Patient Protection and Affordable Care Act mandated that all individual and small group plans must use the community rating method. This method gives the same insurance rate to all members of a community, with adjustments only being allowed based on age, geography, and tobacco use. This effectively raises rates on low-risk individuals to subsidize high-risk individuals. With President Trump and Congressional Republicans vowing to repeal the Patient Protection and Affordable Care Act, this lesser-known but controversial portion of the law may be abolished. This paper will review the various rating methods used by insurance companies in determining premiums.

MeSH terms

  • Community Participation*
  • Humans
  • Insurance Coverage / statistics & numerical data*
  • Insurance, Health*
  • Patient Protection and Affordable Care Act
  • United States