Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Health - Disability
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

D.W. Simpson and Company -- Actuary Salary Surveys
Pension, Life, Health and Investment Actuarial Jobs
Property and Casualty Actuarial Jobs   Registration Form


Reply
 
Thread Tools Display Modes
  #1  
Old 08-04-2009, 05:08 PM
The Drunken Actuary's Avatar
The Drunken Actuary The Drunken Actuary is offline
Member
 
Join Date: Nov 2001
Favorite beer: Early and Often
Posts: 49,467
Default Typical runout for health plan

OK, health actuaries, what's typical runout for a medical plan? Not including fees. I need it as a percentage of annual paid claims.

Thanks!
__________________
I think the dollar will crash irreparably by 2012.... bottom drops out of the dollar. ....Dollars are worthless, 401ks are bust, the markets are valueless...government assumes control over all industry and everything is nationalized by the end of 2012. - gomer_tree
Reply With Quote
  #2  
Old 08-04-2009, 05:26 PM
douglan's Avatar
douglan douglan is offline
Semi-Reputable Actutorney
 
Join Date: Apr 2004
Location: In the Zone
Posts: 11,353
Default

Quote:
Originally Posted by The Drunken Actuary View Post
OK, health actuaries, what's typical runout for a medical plan? Not including fees. I need it as a percentage of annual paid claims.

Thanks!
ooh, IANAHA...but can I guess? I guess approx. 20% (i.e., 2.5 months of average annual claims). I'm prolly a little off though
__________________
The Official AO Actutorney
Reply With Quote
  #3  
Old 08-04-2009, 05:30 PM
DudeMan's Avatar
DudeMan DudeMan is online now
Member
 
Join Date: Jan 2006
Location: Northeast
Studying for shts&ggles
Favorite beer: Ginger Beer
Posts: 8,840
Default

what type of product? Regular Group MC products about 6-10%
Reply With Quote
  #4  
Old 08-04-2009, 05:33 PM
douglan's Avatar
douglan douglan is offline
Semi-Reputable Actutorney
 
Join Date: Apr 2004
Location: In the Zone
Posts: 11,353
Default

LOL, was I (way) too high? This issue comes up in practice from time to time. I usually tell my clients 2-3 months worth of claims. Of course, I have been known to be from time to time.
__________________
The Official AO Actutorney
Reply With Quote
  #5  
Old 08-04-2009, 05:41 PM
FormLetter's Avatar
FormLetter FormLetter is offline
Member
 
Join Date: Feb 2006
Posts: 7,753
Default

Can you be more specific on the question?
Reply With Quote
  #6  
Old 08-04-2009, 05:51 PM
thing's Avatar
thing thing is offline
Member
 
Join Date: Sep 2001
Location: Oregon
Posts: 4,486
Default

Really, really varies by company. A fast payer might be in the single digits, a slow payer might be over 20%. I'm thinking commercial business here, BTW. You'd have to be doing some pretty cutting edge stuff to get below 6%. You'd have to be in a pretty poor cash-flow situation to be over 25%. Midpoint: 15.5%. Enjoy!
Reply With Quote
  #7  
Old 08-04-2009, 06:32 PM
Dr T Non-Fan Dr T Non-Fan is offline
Member
 
Join Date: Sep 2001
Location: Just outside of Nowhere
Posts: 38,290
Default

Quote:
Originally Posted by The Drunken Actuary View Post
OK, health actuaries, what's typical runout for a medical plan? Not including fees. I need it as a percentage of annual paid claims.

Thanks!
Are you referring to what's yet to be paid, divided by what's already been paid?
Questions, since you're looking for free professional advice:
1. "Annual Paid Claims" = All Claims Paid during the year (including payments for prior year's incurred claims), or All Claims Incurred For the Year, Paid during the year?
2. I wouldn't ever think that a guess of this percentage was credible for all kinds of situations. New block of business, perhaps with a complicated benefit design, will be slower. The final months' payments could be unusually more paid or less paid, depending on holidays or deductibles or such.
3. Douglan's estimate is as reasonable as anyone who actually knows anything. Check the poor stat "Days of claims payable in the various health company's quarterly releases. Usually around the 60-day mark.
__________________
DTNF's Basic Philosophy Regarding Posting: There's no emoticon for what I'm feeling! -- Jeff Albertson (CBG)
DTNF's Standard Career Advice: "pass some exams and get back to us."
DTNF's Law of Job Offers: You not only have to qualify for the position, but you also have to be the best candidate available for the offer.
DTNF's Work Philosophy: I am actuary. Please insert data. -- Actuary Actuarying Rodriguez.
Reply With Quote
  #8  
Old 08-04-2009, 06:42 PM
douglan's Avatar
douglan douglan is offline
Semi-Reputable Actutorney
 
Join Date: Apr 2004
Location: In the Zone
Posts: 11,353
Default

Quote:
Originally Posted by Dr T Non-Fan
3. Douglan's estimate is as reasonable as anyone who actually knows anything.
thanks, I think
__________________
The Official AO Actutorney
Reply With Quote
  #9  
Old 08-04-2009, 08:06 PM
DudeMan's Avatar
DudeMan DudeMan is online now
Member
 
Join Date: Jan 2006
Location: Northeast
Studying for shts&ggles
Favorite beer: Ginger Beer
Posts: 8,840
Default

Quote:
Originally Posted by douglan View Post
LOL, was I (way) too high?
not really. 20% is a pretty good conservative estimate.
Reply With Quote
  #10  
Old 08-04-2009, 08:20 PM
Dr T Non-Fan Dr T Non-Fan is offline
Member
 
Join Date: Sep 2001
Location: Just outside of Nowhere
Posts: 38,290
Default

Quote:
Originally Posted by douglan View Post
thanks, I think
Little bit from column A, little bit from column B....
__________________
DTNF's Basic Philosophy Regarding Posting: There's no emoticon for what I'm feeling! -- Jeff Albertson (CBG)
DTNF's Standard Career Advice: "pass some exams and get back to us."
DTNF's Law of Job Offers: You not only have to qualify for the position, but you also have to be the best candidate available for the offer.
DTNF's Work Philosophy: I am actuary. Please insert data. -- Actuary Actuarying Rodriguez.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 04:17 PM.


Powered by vBulletin®
Copyright ©2000 - 2010, Jelsoft Enterprises Ltd.
Page generated in 0.41211 seconds with 6 queries