[Congressional Record Volume 140, Number 106 (Thursday, August 4, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 4, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
          COMMUNITY RATING: AN ISSUE THAT HAS BEEN OVERLOOKED

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                          HON. CASS BALLENGER

                           of north carolina

                    in the house of representatives

                        Thursday, August 4, 1994

  Mr. BALLENGER. Mr. Speaker, there is one aspect of the health care 
debate that seems to have been overlooked: the community rating system 
for individual health insurance purchasers. Community rating raises the 
rates of younger people, while it lowers the rates of those aged 45 to 
54 years, in order to make paying for health insurance more equitable. 
This policy would take $40 billion out of the pockets of people under 
the age of 35. The average median income of this group has fallen 15 
percent in the last two decades. This group needs a tax break, not an 
increase.
  A strict community rating system, as proposed by the Clinton health 
care plan and the other Democratic health care plans, forces 
individuals at lower risk of developing serious medical problems to pay 
for those who are at greater risk. The risks related to age would call 
for a premium 3.5 to 4.5 times as high for a 50-year-old as for a 25-
year-old. Community rating would roughly double the cost of health 
insurance for the young, while cutting in half the rate for middle-aged 
Americans. Median annual income for a worker aged 25 or under is 
$18,313; while that number is $43,751 for a worker aged 45 to 54. Yet, 
some people believe that these two groups should pay the same amount 
for health insurance. The people in their mid-thirties are the least 
insured group in the country already. Clearly, doubling the insurance 
premium for this group will not increase the number of policyholders.
  Mr. Speaker, if you want a health care plan that provides universal 
coverage for all, community rating is not the way to go. By raising the 
price of insurance for those under the age of 35, you give them a 
disincentive to purchase health insurance. In New York, the cost of 
insurance for a single male rose 170 percent after the State 
implemented this policy of community rating. Since adults in their mid-
thirties are already the least insured group. They need to be 
encouraged to purchase insurance, not discouraged. By doubling the 
price of health insurance for this age group, the number of uninsured 
is bound to increase. Community rating is a bad idea which begs for bad 
results.

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