What potential issue arises from community rating concerning younger members?

The potential issue that arises from community rating concerning younger members is that they are charged higher premiums than necessary. Community rating is a system used to set insurance premiums uniformly across a defined group of individuals, regardless of their individual health status. This means that younger, typically healthier individuals may find themselves paying relatively high premiums compared to their actual risk level and healthcare usage.

Since the cost is spread out across the entire community, insurers cannot charge lower premiums based on the individual risk of younger members. As a result, they end up subsidizing the costs for older or less healthy individuals, leading younger members to feel they are overpaying for their coverage—making this an important consideration in discussions around insurance pricing and fairness.