States can merge or keep separate individual and small group markets. Merging markets can stabilize premiums and reduce rates for individuals, but may increase small group premiums and affect available strategies to avoid risk selection.
*Full name: Decide whether to keep separate or merge the individual and small group market risk pools.
*Relevance to the ACA:
The ACA gives states the option to either merge or keep separate their individual and small group markets, excluding grandfathered plans. Relevant sections include:
§1312 - Requires insurers to consider all enrollees in the individual market to be part of one risk pool and all enrollees in the small group market to be in one risk pool, regardless of whether they purchased coverage through the Exchange, unless they are enrolled through a grandfathered plan. A state also has the option to require that individual and small group markets be merged.less