Minn. R. agency 120, ch. 2740, ACTUARIAL EQUIVALENCE OF QUALIFIED PLANS AND QUALIFIED MEDICARE SUPPLEMENT PLANS, pt. 2740.9992

Current through Register Vol. 49, No. 25, December 16, 2024

Part 2740.9992 - EXAMPLE II

Subpart 1.Use of actuarial equivalence test.

A. Question: Is the following plan actuarially equivalent to any Minnesota qualified plan?

Hospital:	$170 per day, 365 days; 80 percent of miscellaneous extras, the cost of anesthesia is included. The policy does not pay for private room even if medically necessary.
Surgery:	$3,000 maximum surgical schedule. Add 15 percent for the administration of anesthesia.
In hospital physicians calls:	$25 per day - 365 day maximum
Maternity:	Any complications
X-ray and lab tests (out of hospital):	$500 maximum - unscheduled

B. Answer (calculated January 1, 1985): test result is 1004 points. This plan is a Minnesota qualified plan number two.

Subp. 2.Worksheet.

Test for actuarial equivalence other than Medicare supplement plans.

A. Worksheet.

		Major Medical
Subpart of part 2740.9964	Benefit	Basic	Superimposed	Comprehensive
1.	Hospital room and board	275
2.	Hospital extras (80 percent)	384
3.	Surgery	189
4.	Physician care; home, office
5.	Physician care; hospital	33
6.	Maternity	25
7.	Diagnostic X-ray and lab	98
8.	Drugs and medicine
9.	Radioactive therapy
10.	Nursing/convalescent facility
11.	Home health care
12.	Physical therapy
12.	Oxygen
12.	Prostheses
12.	Durable medical equipment
12.	Second opinion surgery
12.	Private duty nursing
12.	Ambulance
13.	Hospital room and board in full
14.	All hospital expenses in full
15.	Major medical maximums
Subtotal reasonable and customary medical services
16.	Deductible
16.	Coinsurance
Subtotal net of deductible and coinsurance
17.	Adjust (comb. medical/dental ded.)
18.	COB/No-fault
19.	Limit on "out-of-pocket" expenses
20.	Well baby care
21.	Emergency and supplemental accident
22.	Student dependents
23.-25.	Superimposed major medical
Grand Total	1004
Combined basic and superimposed		XXX	XXX

Equivalent to Minnesota qualified plan number __2__

nonqualified ______

Date _____ By _____

B. Miscellaneous calculations.

(1) Policy does not pay extra for private room even if medically necessary. Deduct three points from the 359. Since the ASP value in 1985 is 220, the number of points will be 356 times the ratio of 170 to 220 or 275.09 points.

(2) The surgical table was evaluated as 3,680.02 points. The points not including administration of anesthesia is 206 times the ratio of 3680.02 to 4620.00 or 164.09 points. For administration of anesthesia, the points are 164 times .15 or 24.6 points.

(3) Since the maximum per diem cost of in-hospital physicians calls is less than the cost for routine follow-up (24.20 times 1.08 or 26.14), subtract 14 points from the number of points for prevailing fee with 365-day maximum. The result is 35 points. Multiply the 35 points by the ratio of $25 to 26.14 or 33.47 points.

(4) Since the ASP factor is 1.15, the $200 and $500 maximum shown in part 2740.9964, subpart 7 is now 230 and 575 respectively. Thus the $500 maximum is 78.26 percent of the way between the two maximums. Therefore the point value equals 89 plus .7826 times (101-89) or 98.39 points.

Minn. R. agency 120, ch. 2740, ACTUARIAL EQUIVALENCE OF QUALIFIED PLANS AND QUALIFIED MEDICARE SUPPLEMENT PLANS, pt. 2740.9992

10 SR 474

Statutory Authority: MS s 62E.09