Living with the community rating shakeout. (New York community rating law) (Special Report: Health Care Trends)

The state's controversial new law means different things for different insurers

New York's new community rating law is designed to make commercial insurers do as Blue plans do -- take all comers.

In the three weeks since the law took effect, some commercial insurers have left the state and health maintenance organizations have filed a lawsuit challenging the new regulations.

The law also has caused insurers to juggle rates and hand some small businesses drastic increases. As a result, the Blues have had an influx of business.

Nonprofit insurers, such as Blue Cross and Blue Shield of Western New York, already had voluntarily priced their insurance products using community rates, charging the same premiums for all people in a particular group. In doing so, a 25-year-old nonsmoker would pay the same rate as a retiree with heart trouble, for example.

Commercial insurers, however, have priced their product according to the experience of the insured group. The healthier the group, the lower the cost of insurance. The situation made it …