Cherry-picking Still Posssible?

[palermo24]

Insurers that participate in the Health Insurance exchanges are obliged to use a limited form of "commmunity rating". But what is to prevent non-participating insurers from creaming off the best risks by offering cheap rates for young and healthy proposers?

 

[DS4]

3 to 1 ratio applies.
Example,

You offer a Bronze plan to a 25 year old for $150/month. That same plan for a 60 year old would be a max of $450.

 

[leevena]

Nothing can stop the lower priced carrier from cherry picking. In fact it would be very difficult for the lower cost carrier not to cherry pick. Remember, good risk chases low cost premium while high cost risk chases benefits. So while the lower cost carrier will be selected by the high cost risks and by the low cost risks, the higher cost carrier will have significantly less low cost risks select them.

 

[taterpeeler]

Why you all even answer this? There are no non carriers... jesus save us

 

[leevena]

Why you all even answer this? There are no non carriers... jesus save us

What are you saying?

 

[TN_agent]

Methinks Palermo24 is either a troll or a college student or foreign reporter attempting to use our collective knowledge instead of doing research on their own.

 

[tonyisme]

Palermo 24 in 2010 Obamacare passed which caused your way of thinking about true underwriting of risk to disappear... be careful who you vote for next time.
Share the wealth around and share the risk around right? How's that 21 year old paying similar rates as a 50 year old working out?
And can't buy insurance until December wow. And get ready to pay 25 to 45% more in 2017

 

[Ann H]

Nothing can stop the lower priced carrier from cherry picking. In fact it would be very difficult for the lower cost carrier not to cherry pick. Remember, good risk chases low cost premium while high cost risk chases benefits. So while the lower cost carrier will be selected by the high cost risks and by the low cost risks, the higher cost carrier will have significantly less low cost risks select them.

That was an excellent answer, Leevena. And that's the reason ACA will become a race to the bottom of the barrel.