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  #11  
Old 08-12-2019, 05:17 PM
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LTC? Is that ever offered on a group basis?

My actual first thought was that this would be for some attempt at creating a state-level form of universal public plan, where the entire state population would be the group. Or possible a form of association coverage where many many employers are grouped together.
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  #12  
Old 08-12-2019, 06:03 PM
Dr T Non-Fan Dr T Non-Fan is offline
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Here's an idea:
Say you have experience for a million lives over, say, five years.

Randomly select 10,000 lives. Total up their experience and divide by however many years of experience those 10000 lives had.
Repeat a few thousand times.
Get the standard deviation.

Figure out what to do with this info. (That's where my expertise stops.)
Do the same for 100,000 lives. The s.d. should be lower for this than for 10,000 lives.

I think for smaller groups, you'd use some (larger) factor that resulted in expected profit that is similar to that of larger groups that you'd use a smaller factor).
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Old 08-13-2019, 10:04 AM
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Old 08-13-2019, 07:40 PM
Pamela Wells Pamela Wells is offline
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Originally Posted by tope View Post
A client of mine insisted that a previous actuarial report they received revealed much greater variation of cost due to different ranges of volume especially between 100 000 and 1 million lives
It's plausible that specialized coverage for very rare conditions (or some other very novel policy) might exhibit this behavior. If you're talking about bog-standard health coverage, however, there are other suspects I'd consider well before trying to dive in to size. Basic demographic differences across different groups can be a very big driver - there are some employers out there that have substantially different age and gender profiles than the average employer. A good example would be Microsoft or Amazon. Both of them are substantially younger and substantially more male than most comparably sized employer groups. Similarly, you could have material differences that are attributable to industry type.
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Old 08-13-2019, 07:43 PM
Pamela Wells Pamela Wells is offline
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Group LTD maybe. Unusual to self-insure because you have to hold an enormous reserve.
Thank you for this. I forgot that disability is part of this subforum too.

I could see an argument for group size factors extending above 10,000 for disability. LTD events are rare enough that it's plausible one may not see reversion to the mean until well above 10,000. It's been a very long time since I worked on any LTD though, so my knowledge is very limited.
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Old 08-15-2019, 01:58 PM
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Quote:
Originally Posted by FormLetter View Post
LTC? Is that ever offered on a group basis?

My actual first thought was that this would be for some attempt at creating a state-level form of universal public plan, where the entire state population would be the group. Or possible a form of association coverage where many many employers are grouped together.
You are right on the money, it is indeed a state health plan (in Nigeria) but some other actuary had given them significant variation in premiums with group size differences, bigger than what I would expect even from the fixed admin expense economies of scale
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Old 08-15-2019, 02:01 PM
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Originally Posted by Pamela Wells View Post
It's plausible that specialized coverage for very rare conditions (or some other very novel policy) might exhibit this behavior. If you're talking about bog-standard health coverage, however, there are other suspects I'd consider well before trying to dive in to size. Basic demographic differences across different groups can be a very big driver - there are some employers out there that have substantially different age and gender profiles than the average employer. A good example would be Microsoft or Amazon. Both of them are substantially younger and substantially more male than most comparably sized employer groups. Similarly, you could have material differences that are attributable to industry type.
Thanks for these, these factors you mentioned would have been captured separately under factor adjustments. The client in this case zeroed in on group size discounts and wanted significant discounts by group size.

This is for a state primary health care scheme in Africa

Once again thank you and everyone for your contributions...You all rock
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