CWA HEALTH CARE REFORM UPDATE: Community Rating

What is community rating and how will it work under the Affordable Care Act?

Under community rating rules, health insurance plans are not allowed to charge customers different prices based on personal characteristics (such as age, health status, or gender).

The Affordable Care Act put in place “adjusted community rating” rules for the small group and individual insurance market. These plans will only be allowed to vary the price of their plan by:

• a 3 to 1 ratio based on age,
• a 1.5 to 1 ratio based on tobacco use,
• size of the family (single coverage vs. family coverage), and
• “premium rating areas” that will be determined by each state.

Health plans will not be allowed to charge different prices based on gender or medical history.

Self-insured and grandfathered fully insured group health plans will be exempt from these requirements.