Research Projects
Research Projects in Health
Modeling Long Term Healthcare Cost Trends
The Society of Actuaries' Pension Section and Health Section Research teams commissioned Professor Thomas E. Getzen of Temple University to construct a resource model for the projection of long term healthcare cost trends. The motivation for creation of the model was driven by its potential usage as a resource for the estimation of reportable liabilities for retiree healthcare benefits as specified under FAS 106 and GASB 45 accounting statements.
The model projects per-person expenditures and growth rates through 2099 using a set of equations and assumptions developed by Professor Getzen with assistance from the Society of Actuaries Project Oversight Group appointed to oversee the effort. The data sources underlying the model assumptions have been clearly specified in the Technical Documentation providing transparency and support for the ultimate results. The model, programmed in Microsoft Excel, includes baseline assumptions as well as flexibility for user–inputted alternative assumptions. In addition, the Project Oversight Group has written a document describing practical issues for actuaries using the model.
You can individually download the model and related documents by clicking below, or for your convenience all the files have been added to a zip file.
If you have any questions or comments regarding the model or documentation, please contact Steve Siegel, SOA Research Actuary.
The Pension Section and Health Section Councils would like to thank the members of the Project Oversight Group for their time and valuable input.
- Kevin Binder, Chair
- John Cookson
- Marilyn Oliver
- Adam Reese
- Russell Weatherholtz
- Keith Williams
- Steven Siegel, SOA Research Actuary
- Jeanne Nallon, SOA Research Assistant
Audio and Handouts from April 1, 2008 Webcast
In April 2008, a webcast was presented by Thomas Getzen, Keith Williams, and Adam Reese on use of the model. The files from the webcast can be obtained below:
Disclaimer for Software Posted on Web site
Important: The Long Term Healthcare Costs Trend Resource Model v3.1 ("Software") posted on this site is the property of the Society of Actuaries ("SOA") and is protected under U.S. and international copyright laws. It was created for the SOA by Professor Thomas E. Getzen.
The Software has been developed for the benefit of actuaries FOR EDUCATIONAL USE ONLY, although others may find it useful. SOA makes the Software available to individual users for their personal use on a non–exclusive basis. No commercial use, reproduction or distribution is permitted whatsoever.
SOA and the authors make no warranty, guarantee, or representation, either expressed or implied, regarding the Software, including its quality, accuracy, reliability, or suitability, and HEREBY DISCLAIM ANY WARRANTY REGARDING THE SOFTWARE'S MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. SOA and the authors make no warranty that the Software is free from errors, defects, worms, viruses or other elements or codes that manifest contaminating or destructive properties. In no event shall SOA or the authors be liable for any damages (including any lost profits, lost savings, or direct, indirect, incidental, consequential or other damages) in connection with or resulting from the use, misuse, reliance on, or performance of any aspect of the Software including any instructions or documentation accompanying the Software. SOA and the authors make no representation or warranty of non–infringement of proprietary rights of others with respect to the Software. The entire risk as to the uses, outputs, analyses, results and performance of the Software is assumed by the user. This Disclaimer applies regardless of whether the Software is used alone or with other software.
Disclaimer for Materials Posted on this Web Page: The model, accompanying documentation, and methodologies contained herein do not represent an official position, statement, or endorsement on behalf of the Society of Actuaries or its members, nor should the material be construed to do so. It is the product of a research effort commissioned by the Society of Actuaries to add to the library of resource tools for the estimation of long term health care cost trends and further knowledge in that area. The model is neither intended to preclude the use of other methodologies for estimation of long term health care cost trends for any purpose nor provide a statement or position on the use, application, or preferability of other methodologies as compared to the methodology described herein.