Quote:
Originally Posted by cincinnatikid
Effectiveness shouldn't change unless you are changing your mix of groups (which creates all sorts of problems). I would use the following approach in a very simplified projection with a static population (usually currently enrolled population):
2018 Premium = 2017 Premium * (1+[(2017 increase)*(1Effectiveness)+(2018 increase)*(Effectiveness)])

Just want to be clear, if the mix of groups stays the same, but the effective dates of rate change are different, then the effectiveness is also changing, right?
Thanks for your formula. Is it an approximate approach? I know my formula is more complicated but does my formula also make sense? (Just want to see if I fully understand the definition of effectiveness)
Also, I sent you a Private Message.