Which statement about community rating is true?

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Multiple Choice

Which statement about community rating is true?

Community rating prices coverage for a group as a whole, not by each individual's health or risk. In this approach, everyone within a defined community or plan pays the same premium, spreading costs across healthy and less healthy members alike. This sharing of risk across the pool is what characterizes community rating. The other ideas describe risk-based pricing—charging based on an individual’s health status or risk profile—or imply universal fixed pricing without regard to plan design, which aren’t how community rating works.

Community rating prices coverage for a group as a whole, not by each individual's health or risk. In this approach, everyone within a defined community or plan pays the same premium, spreading costs across healthy and less healthy members alike. This sharing of risk across the pool is what characterizes community rating.

The other ideas describe risk-based pricing—charging based on an individual’s health status or risk profile—or imply universal fixed pricing without regard to plan design, which aren’t how community rating works.

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