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Community Rating

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A method of calculating health plan premiums using the average cost of actual or anticipated health services for all subscribers within a specific geographic area. The premium does not vary for different groups or subgroups of subscribers to reflect their specific claims experience or health status. Under modified community rating (the most common form), rates may vary based on subscribers' specific demographic characteristics (such as age and gender), but rate variation based on individuals' health status, claims experience, or policy duration is prohibited. "Pure" community rating prohibits rate variation based on demographic as well as health factors, and all subscribers in an area pay the same rate.

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