Comprehensive Medial Insurance - Statistical Analysis for Ratemaking [Discussion]

One of the most difficult tasks facing the Group Actuary today is the development of proper rates for Comprehensive Medical Insurance. The newness of the coverage, the variety of benefit provisions offered, and the many variables which affect the cost o£ this product have combined to raise numerous questions as to what statistical data should be assembled and how it should be analyzed for the purposes of ratemaking. The fact that Mr. Bevan had to approach this problem by making a detailed analysis of one large case rather than a study of several cases serves to illustrate the difficulties that most of us face in this area. Nevertheless, he was able to enlighten us on many aspects of this subject, and his paper is a most welcome and needed addition to our Proceedings. Mr. Bevan shows how important it is to have detailed statistical information of the claim charges. His method of using these charges to determine rates for various types and sizes of deductibles is sound. The only weakness in the approach used is that it does not measure the effect that differing deductibles may have on the actual utilization of the coverage. This, however, could only be measured if sufficient data were available to study the experience of many similar type plans separately by deductible.