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1. Objective
2. Assumptions
a.
Effective Date:
h.
Benefit Changes:
0.0%
(Prospective adjustment)
b.
Experience:
-1.9%
(Adj. to experience period 1)
-3.3%
(Adj to experience period 2)
c.
Enrollment:
i.
Other $ Load:
$0
d.
Current Enrollment:
2,701
Chronic Load:
$0
e.
Medical Trend:
6.0%
j.
Claim Fluctuation Margin:
0.0%
f.
ISL Deductible:
$300,000
g.
Aggregating Deductible:
$125,000
3.
Algorithm
Experience Period 1
Experience Period 2
a.
Paid Claims Period:
7/2015 - 6/2016
7/2014 - 6/2015
b.
Approximate Incurred Claims Period:
6/2015 - 5/2016
6/2014 - 5/2015
c.
Midpoint of Experience Period:
12/1/2015
12/1/2014
d.
Midpoint of Projection Period:
7/1/2017
7/1/2017
e.
Months of Trend:
19
31
f.
Average Subscribers:
2,718
2,749
g.
Medical Paid Claims:
$20,304,717
$21,410,955
h.
Pooled Claims:
Experience Period 1 =
1
Experience Period 2 = 6
$442,611
$2,785,586
i.
Adjusted Paid Claims (g less h):
$19,862,106
$18,625,369
j.
Change in Reserve (Lagged Claims):
1.000
1.000
k.
Network Change:
1.000
1.000
l.
Adjusted Paid Claims (i x j x k):
$19,862,106
$18,625,369
m.
Trend Adjustment Factor:
1.097
1.162
n.
Trended Adjusted Paid Claims (l x m):
$21,781,758
$21,651,020
o.
Add in Individual Claims to Pooled Level:
$425,000
$1,925,000
p.
Plan Change Adjustment Factor (See Assumption h):
0.981
0.967
q.
Enrollment Change Adjustment Factor:
0.994
0.982
r.
Chronic Health Conditions Adjustment and Other $ Adjustments:
$0
$0
s.
Projected Experience Paid Claims [(n + o) x p x q + r]:
$21,646,318
$22,403,253
t.
Claim Fluctuation Margin:
1.00
1.00
u.
Projected Experience Paid Claims with Margin (s x t):
$21,646,318
$22,403,253
v.
Claim Rate:
PEPM:
$667.85
$691.20
Total Monthly:
$1,803,860
$1,866,938
Total Annual:
$21,646,318
$22,403,253
Credibility:
80%
20%
Blended Rate (PEPM):
$672.52
ABC Company
Medical and Pharmacy Funding Rate Projection For a January 1, 2017 Effective Date
—
Medical Claims Projection —
Develop funding rates which cover all medical paid claims and associated administrative expenses for the plan year beginning January 1, 2017.
Per UnitedHealthcare experience reports
January 1, 2017
Lagged one month