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What do actuaries consider?

Actuaries consider past claims experience, trends in costs and utilization of various services that are considered on a national basis as well as for the particular health carrier, or particular employer group if the employer group is rated based on their own claims experience. Actuaries also consider administrative expenses (how much it costs to produce and sell the coverage), and for companies doing business through contracted provider networks, changes in the contract amounts or changes in the rating methods used in determining how much providers are paid must be considered. Actuaries must also consider the appropriate operating costs of the health carrier.