Definitions for "Community Rating"
Related Terms:
Rates, Adjusted average per capita cost, Experience rating, Aapcc, Medical loss ratio, Cost shifting, Covered expenses, Indemnity health plan, Risk contract, Usual, customary and reasonable, Indemnity plans, Indemnity plan, Major medical, Medical insurance, Covered charges, Supplemental medical insurance, Smi , Risk adjustment, Copay, Reasonable and customary, Out-of-pocket costs, Preferred provider organizations, Medigap, Cost sharing, Hospital indemnity insurance, Eligible expense, Covered expense, Major medical insurance, Balance billing, Fee-for-service, Medicare supplement policy, Medigap insurance, Medicare supplement insurance, Medical expense insurance, Payer, Indemnity insurance, Creditable coverage, Capitation, Covered benefit, Guaranteed renewability, Preferred provider organization, Copayment, Health insurance portability and accountability act, Prepaid health plan, Reasonable and customary charges, Benefit package, Co-payment, Cost contract, Medicare supplement, Fee for service
The process of determining a group's premium rate in which the HMO sets premium rates based on the average cost of providing care to the HMO's enrollees. This rating method is required of federally qualified HMOs.
Community rating is a method of HMO rate calculation where the rate charged to a group or to an individual for HMO coverage is based on the profit or loss experience of the HMO’s entire population.
A rating method that sets premiums for financing medical care according to the health plan's expected costs of providing medical benefits to the community as a whole rather than to any sub-group within the community. Both low-risk and high-risk classes are factored into community rating, which spreads the expected medical care costs across the entire community. (2)
Under this rating system, the charge for insurance to all insureds depends on the medical and hospital costs in the community or area to be covered. Individual characteristics of the insureds are not considered at all.
A method of establishing premium rates for small groups (50 members and below) and direct pay or non-group subscribers. The intent is to spread the risk evenly among all subscribers in the pool.
Method of establishing health insurance premiums on a communitywide rather than group-specific basis. The premium is based on a blend of the average cost of actual and anticipated health services use by all enrollees in a geographic area or industry and does not consider variables such as claims experience, age, sex, or health status of the covered population. Community rating spreads the cost of illness more evenly over the whole community. Federally qualified HMO s must community rate.
A method for setting health insurance rates in which everyone in a specific area is charged the same premium rather than having it adjusted individually according to a person's health history. The rate is usually based on the average cost of delivering health care to people living in that area.
A method for establishing the price for health insurance premiums. The insurance company sets one rate for each plan for all covered people in the same geographic area, regardless of age, sex, vocation, health condition, etc.
The idea that an insurer should charge every insured the same premium regardless of age, gender, geographic location or health status.
A rating system that calculates the charge for insurance policies based on current medical costs for a particular community or area. This system does not take into account individual needs.
A method of calculating a health plan premium or capitation rate for all enrollees within a specific geographic area, based on average actual or anticipated costs for the entire group; under this method the premium or capitation rate does not vary for different subgroups of subscribers based on their previous service utilization.
A system for determining the amount of the premium to be paid under a health care plan. The premium is based not on the characteristics of individual insured or groups but on the average cost of health care over a geographic area. (Related: Experience Rating and Medical Underwriting)
A method of establishing a capitation rate which is based on the average cost of actual or anticipated health care used by all enrollees in a given geographic region, community, or defined population.
A system of setting health insurance premiums by which the insurer calculates the total claims or health expenditure experience of the members within a given geographic area or "community," and uses that information to determine a rate that is common for all groups, regardless of the individual claims experience of any one group (contrasts with Experience Rating).
A system of calculating health insurance premiums based on the average cost of providing medical services to all people in a geographic area without adjusting for an individual’s medical history. Also known as area rating.
Calculating the price of health insurance premiums according to the characteristics or utilization of the entire community, not just the insured population. Today, insurers frequently charge higher rates for less healthy individuals. With community rating, everyone who lives in the same area pays an equal amount for health insurance.
The rating methodology required of federally qualified HMOs. The HMO must obtain the same amount of money per member for all plan members. Community rating does, however, allow for variability by allowing the HMO to factor in differences for age, sex and industry factors, although they are not all necessarily allowed under state law.
A method of calculating health plan premiums using the average cost of actual or anticipated health services for all subscribers within a specific geographic area. The premium does not vary for different groups or subgroups of subscribers on the basis of their specific claims experience.
Under the HMO Act, community rating is defined as a system of fixing rates of payment for health services which may be determined on a per person or per family basis and may vary with the number of persons in a family, but must be equivalent for all individuals and for all families of similar composition. With community rating, premiums do not vary for different groups of subscribers or with such variables as the group's claims experience, age, sex or health status. Although there are certain exceptions, in general, federally-qualified HMOs must community rate. The intent of community rating is to spread the cost of illness evenly over all subscribers rather than charging the sick more than the healthy for coverage.
A rating method that determines a single average premium based on the characteristics and claims experience of an entire membership such as an health maintenance organizations (HMO) or an insurance pool. Age, lifestyle, industry, health factors and gender are not used to determine rates (see adverse selection).
Community rating means that health funds can not charge members different premiums for the same level of cover because of their age (other than age at entry), claims history, gender or health.
Insuring everyone in a specific region for about the same price. Premiums are based on the potential health risks or claims experience of the entire population in the area.