Community Rating and Cross Subsidies in Health Insurance

1981 ◽  
Vol 48 (4) ◽  
pp. 610 ◽  
Author(s):  
Roger L. Pupp
Keyword(s):  
Health Insurance ◽  
Community Rating

Community Rating And Sustainable Individual Health Insurance Markets In New Jersey

2004 ◽  
Vol 23 (4) ◽  
pp. 167-175 ◽  
Author(s):  
Alan C. Monheit ◽  
Joel C. Cantor ◽  
Margaret Koller ◽  
Kimberley S. Fox
Keyword(s):  
Health Insurance ◽  
New Jersey ◽  
Insurance Markets ◽  
Community Rating ◽  
Individual Health ◽  
Health Insurance Markets

scholarly journals Policy change and private health insurance: did the cheapest policy do the trick?

2002 ◽  
Vol 25 (6) ◽  
pp. 33 ◽  
Author(s):  
James R G Butler
Keyword(s):  
Health Insurance ◽  
Adverse Selection ◽  
Policy Change ◽  
Financial Incentives ◽  
Private Health Insurance ◽  
Insurance Industry ◽  
Government Expenditure ◽  
Policy Changes ◽  
Community Rating ◽  
Health Insurance Industry

From the introduction of Australia's national health insurance scheme (Medicare) in 1984 until recently, the proportion of the population covered by private health insurance declined steadily. Following an Industry Commission inquiry into the private health insurance industry in 1997,a number of policy changes were effected in an attempt to reverse this trend. The main policy changes were of two types: "carrots and sticks" financial incentives that provided subsidies for purchasing, or tax penalties for not purchasing, private health insurance; and lifetime community rating, which aimed to revise the community rating regulations governing private health insurance in Australia. This paper argues that the membership uptake that has occurred recently is largely attributable to the introduction of lifetime community rating which goes some way towards addressing the adverse selection associated with the previous community rating regulations. This policy change had virtually no cost to government. However, it was introduced after subsidies for private health insurance were already in place. The chronological sequencing of these policies has resulted in substantial increases in government expenditure on private health insurance subsidies, with such increases not being a cause but rather an effect of increased demand for private health insurance.The paper also considers whether the decline in membership that has occurred since the implementation of lifetime community rating presages the re-emergence of an adverse selection problem in private health insurance. Much of the decline to date may be attributable to failure on the part of some members to honour premium payments when they first fell due. However, the changing age composition of the insured pool since September 2000,resulting in an increasing average age of those insured, suggests the possible reappearance of an adverse selection dynamic. Thus the 'trick' delivered by lifetime community rating may not be maintained in the longer term.

Redefining the Terms of Health Insurance to Accommodate Varying Consumer Risk Preferences

1994 ◽  
Vol 20 (1-2) ◽  
pp. 187-201
Author(s):  
Ira Mark Ellman ◽  
Mark A. Hall
Keyword(s):  
Health Insurance ◽  
Price Competition ◽  
Risk Preferences ◽  
Managed Competition ◽  
Benefit Package ◽  
Community Rating ◽  
Insurance Premiums ◽  
Health Insurance Premiums ◽  
Price Comparisons ◽  
Minimal Benefit

Proposals for managed competition present the following question: what are health insurers to compete over? If the competition managers allow insurers to offer truly minimal benefit packages, then competition might focus on enhancements to that minimal package. However, most current proposals require a relatively generous minimal benefit package that includes nearly everything that any consumer is willing to pay for, eliminating this arena of competition. Uniform benefit packages would presumably encourage price competition, not only because it is then the insurers’ only remaining arena of competition, but also because uniform benefits facilitate consumers making price comparisons. However, if government sets global spending caps, adopts mandatory fee schedules, and requires community rating for health insurance premiums, as President Clinton proposes to do, there will be little room left for price competition either. With uniform benefit packages and regulated prices, the managed competition plan ends up with an abundance of management and precious little competition.

Community rating in the absence of risk equalisation: lessons from the Irish private health insurance market

2012 ◽  
Vol 8 (2) ◽  
pp. 209-224 ◽  
Author(s):  
Brian Turner ◽  
Edward Shinnick
Keyword(s):  
Health Insurance ◽  
High Risk ◽  
Supreme Court ◽  
Market Segmentation ◽  
Private Health Insurance ◽  
Low Risk ◽  
Insurance Market ◽  
Risk Profiles ◽  
Community Rating ◽  
Health Insurance Market

AbstractIreland's private health insurance market operates on the basis of community rating, alongside open enrolment and lifetime cover. A risk equalisation scheme was introduced in 2003 to bolster community rating. However, in July 2008 the Irish Supreme Court set aside this scheme, on the basis of the interpretation of community rating in Irish legislation. This decision has significant implications for the Irish private health insurance market. This paper reviews the development of the market, focusing in particular on community rating. The breakdown of community rating in a market with multiple insurers with differing risk profiles is discussed. Applying this to the Irish market, it can be seen that the Irish Supreme Court judgment has significant implications for the application of community rating. Specifically, while community rating operates within plans, it no longer operates across the market, leading to high-risk lives paying more, on average, than low-risk lives. It has also led to greater opportunities for insurers to engage in market segmentation. This may have relevance for the design and operation of other community rated markets.

Sign in / Sign up

Export Citation Format

Share Document