Adjusted Community Rating(redirected from Factored Rating)
Adjusted Community RatingThe 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.
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