Model Rating Strategies

•Experience Rating

•Manual Rating

Compare Enterprise Level Results

•Actual vs. Expected

Primary Deliverables…

Monitor Rating Strategy and impacts to the

distribution of Rate Increases and Loss Ratio by:

Features

•Health Plan

•Business Segment

•Group

•Plan

Test the implications of rating variables across

multiple years and apply different methodologies

by user defined Group Size…

Features

Manage variations in plans from group to group

with Claims Normalization and Adjustment

process…

Features

Experience Period Claims

Remove Experience Period Plan

Factor(s)

NormalizedClaims

Adjust Claims to Current Plan

Factor(s)

AdjustedClaims

Adjust Claims to Current

Enrollment Distribution

Examine and balance Pooling Charges and

Pooling Credits…

ExcessClaims

Total Claims

TrendIndexing

DollarTo

Dollar

Features

Large Claims

Pooling Credit and Charges

Apply Trends by:

•Year

•Plan

•Medical and Rx

Features

Rating Process

10 Stage Actuarial Rating Engine

• Rating data is processed modularly in 10 steps. This provides for:

• Simplification of rating method; greatly reducing the time and effort needed

to update or change components within the rating process.

• Greater flexibility in adapting to new business needs.

• Easy auditing of rating data.

• Rapid recalculation of rates after manipulation of rating variables.

Paid Claims

Large Claims

Claims Normalization

and Adjustment

PoolingExperience

Rate

Summary Data and Extracts

Credibility Blended

Rate

Presentation Rate

Rating Process

RatingProcess

Stages

Manual Rate

Enrollment(Current and Experience

Period)

Rating process

Data extraction flow

Experience Rate

Credibility Blended

Rate

Rating Process

Controls

Set ranges for group Pooling Class…

Set Pooling Point by Class…

Set Pooling Method by Class…

Balance Pooling and

Large Claims

Rating Process

Controls

Manage size classification, Plans, and Trend…

Rating Process

Controls

Set the experience period and contract duration…

Adjust credibility…

Experience Rate

Credibility Blended

Rate

Rating Process

Controls

Create customizable Large Claim Reports…