LICONY said, "We are also on record as endorsing the concept of open enrollment for small groups and modified community rating
Under the ACA, businesses of 50 employees or fewer are required to use a rating format, called modified community rating
, to determine the pricing of small business group healthcare premiums.
This usually meant that these groups were community rated by insurers, but under the ACA small group health insurers have to apply a modified community rating
standard; make essential health benefits available, consistent with a state benchmark plan; and meet certain actuarial requirements.
The law's modified community rating
ensures that the oldest enrollees can be charged no more than three times what the youngest, healthiest enrollees are charged.
In Colorado, modified community rating
has been the standard since 2009 When House Bill 07-1355 superseded then-current law allowing unfettered rating.
Under both the Massachusetts reform and the ACA, prices are set in a modified community rating
framework: prices can vary by only certain enrollee characteristics and only within certain ranges.
Our state law has required guaranteed availability of coverage to every small employer and individual, guaranteed renewability, provides a modified community rating
and sets a minimum medical loss ratio of 80% in the individual and small employer markets.
Co-ops in states with community rating laws (or modified community rating
aimed at smaller businesses) find it even more difficult to achieve savings.
The remedy for its defects, they believe, is more widespread adoption of managed competition, by which they mean an artificial market in which health plans compete but are required to charge the same premium to all enrollees (community rating) or at least the same premium to everyone of the same age (modified community rating
Some incremental reform proposals call for modified community rating
, which may adjust insurance premiums for age, place of residence, or gender.
According to HB 1622, beginning July 1, 1995 the state would operate under a modified community rating
system (some variations allowed) that would lead to phasing in a pure community rating system beginning January 1, 1999.
Retirees could stand to benefit from exchanges, where they can buy health Insurance, as well as other insurance-market reforms including guaranteed issue, modified community rating
, and premium and costsharing subsidies for those under 400 percent of poverty, as well as increased health plan choices, Fronstin says.