An Actuarial Analysis of a Prospective Experience Rating Approach for Group Hospital Surgical Medical Coverage

In view of the current widespread interest in the field of hospital, surgical, medical coverage and its attendant cost, it seems desirable that there be a free interchange of ideas between the insurance industry and Blue Cross-Blue Shield in order to facilitate expansion of coverage to as large a segment of the United States population as possible. Because of their early entry into the field and their widespread coverage of the population in concentrated areas, the Blue Cross-Blue Shield Plans have much to offer in the way of statistics and experience in this particular phase of the insurance business. The insurance industry, on the other hand, now provides hospital, surgical, medical coverage for more of the population, nationally, and has the advantage of more familiarity with insurance principles generally. One area of mutual interest should be the proper underwriting and actuarial approach to experience rating of group hospital, surgical, medical business.