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  #21  
Old 04-23-2008, 09:57 AM
MysteriousWays MysteriousWays is offline
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Quote:
Originally Posted by Willie Mosconi View Post
I included expense in that calculation.
That's what I thought, thanks!
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  #22  
Old 04-29-2008, 11:37 AM
Shadowcat Shadowcat is offline
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i did not include expense in the LR calc. isn't it most common for LRs to be calculated with only claims in the numerator? i rarely see it with expenses included. oh well, i doubt they will pass or fail you just based on that.
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  #23  
Old 05-09-2008, 12:10 PM
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Hackeni Hackeni is offline
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benefit loss ratio = claims / revenue

overall loss ratio = (claims + expense) / revenue
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  #24  
Old 05-21-2008, 05:46 PM
BuckyBadger BuckyBadger is offline
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I calculated revenue for 200601 as the sum of revenue from the experience period divided by 12, times 1.14 (for HMO) ^ 13.5/12 (13.5 is the months of trend between 12/1/2004 and 1/15/2006) and repeating this for future months (14.5/12 for February, etc.)

Am I doing this right or am I missing something???
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  #25  
Old 05-23-2008, 09:09 AM
MikeTheTiger MikeTheTiger is offline
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Quote:
Originally Posted by BuckyBadger View Post
I calculated revenue for 200601 as the sum of revenue from the experience period divided by 12, times 1.14 (for HMO) ^ 13.5/12 (13.5 is the months of trend between 12/1/2004 and 1/15/2006) and repeating this for future months (14.5/12 for February, etc.)

Am I doing this right or am I missing something???
I don't think there is any "right" way to do it given the data that's provided. There is clearly a disconnect between the premium in the experience period and the premium at the end of the available data. Something happened that we don't have data to analyze. Given that reality, the way you are suggesting to do it would be the best way to compare apples-to-apples when it comes to projecting claims and projecting premium so it'll give the most accurate MLR, but it's going to overstate premium on a PMPM basis. Of course, we also are going to have overstated claims on a PMPM basis anyway if the drop in premium was due to demographics that would impact claims expectations.
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  #26  
Old 06-04-2008, 09:21 PM
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Does anybody use setback lives? I remember using 3-month setback when I did underwriting, but I don't see it mentioned anywhere in the module or sample exercise.
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  #27  
Old 06-17-2008, 10:33 AM
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Quote:
Originally Posted by GraffixMan View Post
I just started messing around with this spreadsheet and I am matching the $240.

Assumptions
1) Experience PMPM is calculated as all revenue from 200406-200505 (nothing adjusted) divided by all members from 200406-200505 (nothing adjusted)
2) This PMPM is then trended from 11/30/2004 (midpoint of 200406-200505) to the midpoint of each projection month (for example, 1/15/2006 for 200601 for approx 13.5 trend months or 1.125 trend years) at annual rates of 14% for HMO and 17% for PPO.

How are people arriving at $215 and $226?
I was able to match the $215 figure some people were getting, but I straight up think it is wrong. P015 should not be included in the experience period for 2 reasons. (1) no revenue; and (2) not included in the forecast template. P015 seems to be something like an ASO plan.

Quote:
Originally Posted by MikeTheTiger View Post
The big drop in premium for 2005 seems to indicate a change in the underlying demographics of the population insured.
I see there is a huge drop in Revenue PMPM, but I don't see any change in AGI factor. Seems more likely there was a 9% rate decrease b/c Loss Ratio for 2004 was too low. For the experience period, I decided to adjust all 2004 revenue by -9% to put the premiums on par with 2005. I matched the $226 figure in doing so. I believe this to be the right answer.

Revenue PMPM = $227.60
Claims PMPM = $169.90
Expense PMPM = $15.90
Loss Ratio (w/o expense) = 74.7%
Loss Ratio (w/ expense) = 81.7%
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What difference, at this point, does it make?

Last edited by DudeMan; 06-17-2008 at 03:27 PM..
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  #28  
Old 06-18-2008, 09:30 PM
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Guy Smiley Guy Smiley is offline
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I was looking forward to the model solution providing some clarity on the right way to do this. No such luck.
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  #29  
Old 06-19-2008, 03:52 PM
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Quote:
Originally Posted by Guy Smiley View Post
I was looking forward to the model solution providing some clarity on the right way to do this. No such luck.


Not a very helpful model solution to say the least.
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  #30  
Old 04-21-2009, 04:49 PM
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I am close to all these numbers except for the claims PMPM. Mine is really high at $182.48. I wonder what I am doing wrong. I got the avg pmpm value for each plan from the base period. Then, I projected it to the year 2006.... like for 200601, I trended the annual rate by 13.5 months..

Could someone pls tell me if I missed somthing here....

Quote:
Originally Posted by GraffixMan View Post
I was able to match the $215 figure some people were getting, but I straight up think it is wrong. P015 should not be included in the experience period for 2 reasons. (1) no revenue; and (2) not included in the forecast template. P015 seems to be something like an ASO plan.


I see there is a huge drop in Revenue PMPM, but I don't see any change in AGI factor. Seems more likely there was a 9% rate decrease b/c Loss Ratio for 2004 was too low. For the experience period, I decided to adjust all 2004 revenue by -9% to put the premiums on par with 2005. I matched the $226 figure in doing so. I believe this to be the right answer.

Revenue PMPM = $227.60
Claims PMPM = $169.90
Expense PMPM = $15.90
Loss Ratio (w/o expense) = 74.7%
Loss Ratio (w/ expense) = 81.7%
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