SOA GH DPGroup & Health — Design & Pricing

Inpatient utilisation 60 admits per 1,000 per year; average cost per admit 20,000; member coinsurance 20%. Net claim cost PMPM is:

Gross claims per member rise from 5,000 to 5,400 (8%). With a 1,000 deductible, the trend on claims net of deductible is:

A 300-life group has experience claims PMPM of 450 (after pooling); manual is 400; credibility 0.6; pooling charge 30. The experience rate is:

Under the ACA individual market, an insurer whose enrolees have below-average risk scores will:

A small-group carrier's medical trend was 7% last year. Decompose trend into its components, explain how each is estimated, and describe two reasons the insurer's pricing trend for next year might differ from the observed 7%.

A 1,200-employee employer is fully insured and asks whether to move to self-funding with stop-loss. Evaluate the options (fully insured, minimum premium, ASO with specific and aggregate stop-loss) on risk, cash flow, cost and regulation, and recommend.

An employer wants to add a high-deductible health plan (HDHP) with an HSA alongside its existing PPO. Describe the pricing considerations, including selection effects, induced utilisation, actuarial value and the effect on the PPO's rates.

A group health block has 200 lives with individual credibility standard requiring 1,000 lives for full credibility, using the square-root rule. Calculate the credibility factor $Z$ assigned to the group's own experience.