Underwriting & Rate Setting

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Underwriting and Rate Setting

How are factors – such as consumer demographic and medical information – considered to set rates that are both affordable for consumers and sustainable for the system?

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Medical Underwriting

Policy Definition: A process used by insurance companies determine an individual’s your health status when applying for health insurance coverage. Underwriting concludes whether to offer an individual coverage, at what price, and with what exclusions or limits. source

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Rate Banding

Policy Definition: Rate banding is a form of setting rates that limit the variation in premiums attributable to age, health status and other characteristics. Rating bands are either expressed as a ratio of the highest rating factor to the lowest (e.g. 1.5:1) or as the allowable variation above and below an index rate (e.g. +/- 30%). source

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learn more at unitedstatesofcare.org