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Old 10-30-2007, 11:17 PM
feierfeierdou feierfeierdou is offline
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Default Module Exercise - Pricing part

The assignment file only mentions the 2004 and 2005 have the same demographic factors for the group. However, we still need the demo factor for the manual portion of the premium calculation. Does anyone know how to get this factor? Thank you!
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Old 11-12-2007, 04:37 PM
cincinnatikid cincinnatikid is offline
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Originally Posted by feierfeierdou View Post
The assignment file only mentions the 2004 and 2005 have the same demographic factors for the group. However, we still need the demo factor for the manual portion of the premium calculation. Does anyone know how to get this factor? Thank you!
I haven't looked at this yet, but it's probably safe to assume (though it may be worth noting) that if they give you a manual rate and no other info, it is already adjusted for the benefits and demographics.
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Old 11-12-2007, 05:12 PM
Badger484 Badger484 is offline
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I just used 1.0 for this since there was no change from '04-'05
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Old 12-08-2007, 11:55 AM
MikeTheTiger MikeTheTiger is offline
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Originally Posted by feierfeierdou View Post
The assignment file only mentions the 2004 and 2005 have the same demographic factors for the group. However, we still need the demo factor for the manual portion of the premium calculation. Does anyone know how to get this factor? Thank you!
This is clearly a gap in the information they provided. You are correct that to calculate the manual rate with which to blend the experience rate, we need to know the demographic factor(s) for the specific group. We need more than just the change from year-to-year. Since the information was not provided, I guess we should just assume that the group has average demographics and use a factor of 1.0. I'll probably mention something in my write-up that the rates quoted assume a factor of 1.0, but that we should get better information on the group census and adjust the rate accordingly.
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Old 12-18-2007, 10:16 PM
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Willie Mosconi Willie Mosconi is offline
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How can we use the benefit factor indices when neither the current plan nor the proposed plan are in the list of plans there? I wasn't sure if we could use this list in either the manual or experience rating pieces. I developed my own benefit factors for the group's current plan and proposed plan for the calculations.

Last edited by Willie Mosconi; 12-19-2007 at 10:29 AM..
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Old 12-19-2007, 10:42 AM
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Willie Mosconi Willie Mosconi is offline
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I just figured out that I didn't need this for the manual rate. I think we're just supposed to use the manual rate calc exactly from the case study, just with the new Target LR.

One question on the manual rate: did anyone notice the differences between the Small and Medium group membership/claims from the exercise for Task 1 and from the case study? The membership was different for both groups between the two sets of data, and the claims for Medium groups were also different. However, the claims for the Small groups was the same. The differences aren't that dramatic, but if we need to use the small and medium group data from the exercise, that would change the manual rate slightly. I guess I could just comment on that in the memo.
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Old 12-19-2007, 11:06 AM
MikeTheTiger MikeTheTiger is offline
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Originally Posted by Willie Mosconi View Post
I just figured out that I didn't need this for the manual rate. I think we're just supposed to use the manual rate calc exactly from the case study, just with the new Target LR.
You'll still need the proposed plan's benefit factor for the manual rate calc as well as the change in benefit factor for the experience calc. The cost model included in the template is for the 1.0 plan. You just need to model the benefits for the current and proposed plans (including utilization adjustments) and compare the results to the 1.0 to get their relativities.
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Old 12-19-2007, 01:11 PM
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Willie Mosconi Willie Mosconi is offline
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You'll still need the proposed plan's benefit factor for the manual rate calc as well as the change in benefit factor for the experience calc. The cost model included in the template is for the 1.0 plan. You just need to model the benefits for the current and proposed plans (including utilization adjustments) and compare the results to the 1.0 to get their relativities.
Thanks. I agree. I should have been a little more clear about what I meant. I was looking at the manual rate calc spreadsheet in the case study that only grossed up the claims to the premium for the entire block. Then in the experience rating spreadsheet they take that rate and adjust for the new benefit design.

For the manual rate, I got something in the neighborhood of $200 (including the adjustment for size and for benefit design). For the experience-only rate (no credibility weighting yet), I got something around $215. Does that sound about right?
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Old 12-19-2007, 01:14 PM
MikeTheTiger MikeTheTiger is offline
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Originally Posted by Willie Mosconi View Post
Thanks. I agree. I should have been a little more clear about what I meant. I was looking at the manual rate calc spreadsheet in the case study that only grossed up the claims to the premium for the entire block. Then in the experience rating spreadsheet they take that rate and adjust for the new benefit design.

For the manual rate, I got something in the neighborhood of $200 (including the adjustment for size and for benefit design). For the experience-only rate (no credibility weighting yet), I got something around $215. Does that sound about right?
Those numbers sound about right. I had around $201 and $215.
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Old 03-03-2008, 06:38 PM
mandy12131313 mandy12131313 is offline
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I'm a bit confused here. Could anybody help me to understand how to do the size adjustment for this assignment?

Thanks!
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