Market Rating Reforms

The Affordable Care Act limits the factors that can be used to charge consumers greater health insurance premiums. For insurance coverage effective January 1, 2014, health insurance issuers in the individual and small group markets are allowed to vary premiums based on age (within a 3:1 ratio for adults), tobacco use (within a 1.5:1 ratio and subject to wellness program requirements in the small group market), family size, and geography.  

Under the law, states can choose to enact stronger consumer protections than these minimum standards.  In addition, starting in 2017, states have the option of allowing large employers to purchase coverage through the Exchanges.  For states that choose this option, these rating rules also would apply to all large group health insurance coverage.  These requirements standardize how health insurance issuers can price products, bringing a new level of transparency and fairness to premium pricing.

Geographic Rating Areas

The Market Rules and Rate Review Final Rule (45 CFR Part 147) provides that each state will have a set number of geographic rating areas that all issuers in the state must uniformly use as part of their rate setting. This page contains information on the specific geographic rating areas being used by each state.

Other State Specific Rating Variations

The Market Rules and Rate Review Final Rule (45 CFR Part 147) provides that each state will have age rating ratios of 3:1 using a federally established age curve, tobacco rating ratios of no more than 1.5:1 and per member rating unless a state requests ratios less than the standard, is a community rating state with uniform family tiers, or allows for averaging of enrollee premiums in the small group market. This page contains information on the specific rating variations used by states