Adjusted Community Rating

(redirected from Factored Rating)

Adjusted Community Rating

The stratifying of insurance premiumrates—e.g., of health insurance—based on all members’ use of health benefits in a particular community and not on individual use of benefits.
In simplest terms, adjusted community rating is a rating method under which an insurer charges a particular group an amount derived by modifying the community rate for the group's specific demographic factors (e. g., age, gender, family composition, geography). Under ACR, a single rate applies to all small groups in the market, with limited adjustments allowed for specified “case characteristics.” The insurer sets a base rate for a particular set of case characteristics. The group's actual premium rate is then determined by varying the base rate based on a group's specific case characteristics that state law permits insurers to take into account when setting premiums. Allowable case characteristics often include age, gender, industry, geographic area, family composition, and group size.
References in periodicals archive ?
Divide Total Weighting Rating for each machine by Total Weighting Factor to determine Factored Rating.
Divide Quoted Price for each machine by Factored Rating to determine Price per Point.