States’ Experience with Guaranteed Issue and Community Rating
Of the 10 states that tried instituting the combination of community rating and guaranteed issue, many have either repealed or reformed the measures.
Key takeaways from these 10 states’ experience:
- Anticipation of the death spiral can cause insurers to leave the individual market.
- States that began with a 3:1 ratio for community rating often reformed the measure by widening the ratio.
- States that did not start with an individual mandate, or a requirement to buy insurance, sometimes had to add one.[1]
[1] “The Impact of Guaranteed Issue and Community Rating Reforms on States’ Individual Insurance Markets,” Milliman, March 2009.
Source: “The Impact of Guaranteed Issue and Community Rating Reforms on States’ Individual Insurance Markets,” Milliman, March 2009.
“It is one of the happy incidents of the federal system, that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Justice Louis D. Brandeis (1932)
