Policy Examples

• In 2013, 11 states reported using adjusted community rating as a form of premium rate setting, using actual or estimated health status or claims to lower costs. source
• Prior to the Affordable Care Act (ACA) plans could adjust for various factors, such as occupation, weight, and claims history when rate setting. Post ACA plans may only adjust rates for family size, age, geographic area, tobacco use. source

Outcome Evidence

• The National Bureau of Economic Research found community rating regulations risk substantial adverse selection when large numbers of unhealthy individuals remain on the private market; however, Medicaid can be a complement to risk adjustment programs because of its potential to level set adverse selection. source