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  #41  
Old 01-13-2015, 02:20 PM
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Originally Posted by lifishing007 View Post
So Nebraska used standard age factor statewide?
Every state did. It's part of the ACA law.

A bit of self-promotion from waaay back:
http://publications.milliman.com/pub...e-restless.pdf
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  #42  
Old 01-13-2015, 02:52 PM
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Thanks, I still have so much to learn in health.

I was not thinking about age slope. CoOpportunity may price the bronze base rate at a higher level and plantinum base rate at lower level, all before age factor and area factor adjustment.
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Last edited by lifishing007; 01-13-2015 at 02:56 PM.. Reason: clarifying my post
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  #43  
Old 01-13-2015, 03:27 PM
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how did this not raise any suspicions from the DOI?
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I did 100's of rate filings earlier in my career. Not once was I questioned with a concern about rates being too low.
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Really?

Well, that certainly is interesting.
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From employer sure, but not from regulators.
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I've never seen the DOI suggest rates were "too low", as that could be politically troublesome for them.

I have seen them suggest that a rate increase was insufficient.

In this case the DOI might have felt it was a crapshoot and the other two insurers were as likely to be high as COOP was low. Not sure I agree, but it isn't a crazy opinion.
Same experience here. I've never seen or heard of any of employers' rate filings getting questioned for being inadequate. And that includes rate filings where the projected loss ratio was over 100%. From what I can tell, unless the entity's RBC level is really low, they don't care if a carrier loses a bunch of money on one particular product line.
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  #44  
Old 01-13-2015, 03:37 PM
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Thanks, I still have so much to learn in health.

I was not thinking about age slope. CoOpportunity may price the bronze base rate at a higher level and plantinum base rate at lower level, all before age factor and area factor adjustment.
The bolded, underlined is something I would really expect any DOI to call out and disallow. The single risk pool and related rating rules almost 100% disallow this.
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  #45  
Old 01-13-2015, 03:54 PM
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The bolded, underlined is something I would really expect any DOI to call out and disallow. The single risk pool and related rating rules almost 100% disallow this.
Agreed - given the rating rules, they would have to have either filed paid-to-allowed ratios that were flipped, or benefit richness factors that were flipped. Neither would get through a DOI review that was at least semi-scrutinous.
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  #46  
Old 01-13-2015, 05:16 PM
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That said, the first year through, some DOIs were so swamped I bet a lot of stuff could have got through that wouldn't have a few years prior.
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  #47  
Old 01-13-2015, 06:07 PM
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That said, the first year through, some DOIs were so swamped I bet a lot of stuff could have got through that wouldn't have a few years prior.
How would you know if price is being relatively too low/high?

For example, I use one base rate $500 for all SG plans.

Paid to Allowed ratio for each metal levels in the order of P, G, S, B
***********P***G**S***B
Company A: 0.95 0.9 0.6 0.5
Company B: 0.85 0.8 0.7 0.65

Would DOI shut down company B's paid to allowed ratio?
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  #48  
Old 01-13-2015, 06:17 PM
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Originally Posted by lifishing007 View Post
How would you know if price is being relatively too low/high?

For example, I use one base rate $500 for all SG plans.

Paid to Allowed ratio for each metal levels in the order of P, G, S, B
***********P***G**S***B
Company A: 0.95 0.9 0.6 0.5
Company B: 0.85 0.8 0.7 0.65

Would DOI shut down company B's paid to allowed ratio?
Paid-to-allowed ratios should generally follow closely with actuarial value with some allowance for induced utilization. Some states are flexible in how much induced utilization they allow as long as it's justified; others (I think maybe NY) prescribe that it cannot exceed the HHS published factors.

To your example, I think a DOI would more likely attack Company A for a 50% (0.9/0.6) difference between Gold and Silver prices than Company B underpricing their Platinum. A DOI probably should catch that Company B's ratios are inverted at the Platinum and Bronze levels (assumes higher utilization that average at Bronze and lower than average utilization at Platinum), but as was noted elsewhere in the thread it may have been able to slip by some regulators in 2014 if it isn't totally ridiculous.
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  #49  
Old 01-14-2015, 09:29 AM
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NPR had a story on this this morning. They had some analyst on who described it as a "perfect storm" of problems.

They then listed several problems, all of which were caused by underpricing.
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  #50  
Old 01-14-2015, 10:13 AM
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By the way, one element of the "perfect storm" they described on NPR was that the COOP was expecting more money from the gov't that it didn't get.

I think that's BS. I think when they set rates they weren't assuming big checks from the gov't, I think they were hoping the rates would be sufficient.

Maybe I'm wrong?
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