Determining Ultimate Claim Liabilities for Health Insurance Coverages

The purpose of this paper is to add another chapter to the fund of knowledge being accumulated on loss reserving techniques. Except for Paul Otteson’s paper on Group Accident and Health Hospital Therapeutic Benefits (PCAS XLI, 1954), nothing has been published in the Proceedings in recent years on the methods employed to develop ultimate health insurance loss costs. The Proceedings of the Society have analyzed and presented various methods of establishing ultimate loss costs for various lines of insurance. Generally, the same techniques are used in developing ultimate loss costs for health insurance benefits. The items of most interest are probably the settlement patterns of the various health coverages and any seasonal or cyclical patterns which they display.