Small-Group Session

Issues in Health Insurance Reform: Rating in the Small-Group Market, Merging the Individual and Small-Group Markets, and Risk Adjustment
March 20, 2009


Sally Coberly, PhD


This small-group session, the fourth in a series on insurance reform issues, focused on rating and underwriting in the small-group market, issues associated with merging the individual and small-group markets, and the use of risk adjustment and/or reinsurance, particularly in the context of an insurance exchange, to reduce incentives for risk selection. Discussion focused on the wide variation among the states in rating restrictions in the small-group market and the implications of merging the individual and small-group markets for premiums in each segment. Participants also explored the use of risk adjustment in the non-disabled, under age 65 market, alternatives for reducing risk selection, and the challenges of using risk adjustment.


John M. Bertko, FSA, Adjunct Staff, The RAND Corporation; Bela Gorman, FSA, MAAA, Lead Consultant, Gorman Actuarial, LLC; Richard Kronick, PhD, Professor of Family and Preventive Medicine, University of California at San Diego; Gary Claxton, Vice President and Director, Health Care Marketplace Project, Henry J. Kaiser Family Foundation

Slides from the presentation by Mr. Bertko, and biographies for all of the speakers, are available for download.

Related Materials

Other recent meetings in the Forum's series on health insurance reform include sessions on underwriting, rating, and regulation in the individual market (December 3, 2008); rating rules in the individual market, part II (February 19, 2009); health insurance exchanges (March 6, 2009); actuarial equivalence (April 7, 2009); health insurance exchanges, part II (April 15, 2009); and federal/state regulatory roles, subsidy administration (May 8, 2009).

For more information on rating rules in the small group and individual markets, see "Small Group Health Insurance Market Rate Restrictions, 2007" and "Individual Market Rate Restrictions (Not Applicable to HIPAA Eligible Individuals), 2008."

More information on merging the individual and small group markets is available through Gorman Actuarial: "Impact of Merging the Massachusetts Non-Group and Small Group Health Insurance Markets" and "Reform Options for Maine's Individual Health Insurance Market" (click on "Maine" to download the Word file).

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