Health Actuaries

[Black Mage]

Hi,

I am an aspiring FSA, and have been working in the Group Medical Dept. of my Company for the past 6 months. Actually, it's my first rotation, and exposure to the Actuarial Career. I was wondering if anyone could support or deny my assumption that there is not much actuarial applications in this particular field. I have observed a lot of Finance, but there is no pure Actuarial work. In Financial Management there can be reserve calculations, in Life Insurance there are lots of calculating APV, cash flow testing, etc.
I appreciate any comments or opinions on this matter. Thank you.

[Patience]

Originally Posted by stonybrookcalc

I was wondering if anyone could support or deny my assumption that there is not much actuarial applications in this particular field.

Do you mean pure math, number crunching? As opposed to client contact, writing policies, dealing with state insurance departments, studying experience, pricing?

There is more diversity in health than some other fields, but there is still plenty of need for valuation actuaries as well.

and when I say health I mean medical, LTC, disability, dental, critical illness, medicare supplement, etc group and individual

My job is not "pure actuarial", and I am happy about that, but they are available.

[Lucid]

Originally Posted by stonybrookcalc

In Financial Management there can be reserve calculations, in Life Insurance there are lots of calculating APV, cash flow testing, etc.

Are you implying that there are no reserve calculations in health insurance? Calculating reserves can be an important part of the field, check out the recent thread on the IBNR article.

I think you may be disappointed with any field of actuarial science if you expect to find the type of math in the textbooks we study applied to the job on a daily basis. However, there certainly are some actuarial principles applied to the health field. I would list reserve calculations, interest theory, credibility theory, perhaps regression, some time-series (ie, seasonality). But day-to-day work for most actuaries in any field can pretty much be summed up as just adding, subtracting, multiplying, and dividing.

[Axsuetarian]

I think you may be disappointed with any field of actuarial science if you expect to find the type of math in the textbooks we study applied to the job on a daily basis.

That's what I'm saying

can't hit the nail on the head any better than that!

[Dr T Non-Fan]

1. How much will medical claims cost next year?
2. What trend should we use to forecast next year's medical claims, AND WHY? And why is it different from some official outside source?
3. Will we need to raise rates, or does the trend include demograpohic changes that are already considered in our rating structure (aging of population, for example)?
4. A new drug is coming out. Predict the costs for the next few years.
5. Old drugs are going OTC or generic. Predict the savings for the next few years.
6. If a plan has a single deductible = $2000, and family (more than one person) deductible = $4000, how much more (percentage) will a two-adult and one-child contract cost over the single contract? (MSA and HSA products are formed this way. One would use convolution, from Life Contingencies, to create new prob dist tables.)

[Black Mage]

The listing of tasks that an actuary in Group Medical does shows a few possible applications that I was not aware of. Some are not completely, actaurial, which I am fine with.
I'm happy that I don't do calculus all day, but I just wanted to make sure that at my current position I am getting applicable Health Actuarial experience. I really like the people and (most) of the projects that I work on. There is more actuarial aspects than I thought originally, thanks a lot for the information.

[Rob_Lynch]

What is your definition of "Actuarial application"? If it is having a nice rote set of formulae to apply to the same problem over and over, then you are correct, there is not much of that in group medical work. If it is having to stay on top of the fast-changing economic, legal and political landscape of a very dynamic area, not to mention the continuously changing nature of health care delivery system itself, and be constantly adjusting your thinking, methods and approaches to achieving the best results, then you are wrong, because that is what life in group medical is all about. Which is why I, for one, LOVE this work!

BTW, I worked in pensions for awhile, and was just about ready to hang myself out of sheer boredom after 6 months.

Rob Lynch

[mr.c]

Hey - Welcome to the outside of the IBNR thread, Rob! I hope that you find some stuff work sticking around for.