Austin Frakt draws our attention to an NBER paper that finds an economic benefit from community rating. The argument: in imperfectly competitive markets, the gain to older buyers of insurance is less than the loss for younger buyers. However, the study ignores the most basic harm caused by the mispricing of health insurance; those who are over-charged will underinsure and those who are undercharged will over-insure. It also ignores an ethical problem previously addressed at this blog; older buyers are wealthier and have higher incomes.
The better answer: let insurance markets become competitive.