2019 Health Meeting Virtual Session 91 - Medicaid Margin Assumptions – Opening the Black Box

In Medicaid rate development, actuaries have not historically shared models that developed the margin (i.e. underwriting gain) assumption. This is unfortunate, given that margin assumption is one of the most critical components of rate development to ensure financial solvency of Medicaid Managed Care Organizations (MCOs). In this session, we will discuss the primary components of this assumption and share working models that help actuaries quantify these components—including the cost of capital and risk (or contingency) margins. We expect a lively discussion as we “open the black box” and discuss these actuarial assumptions in public for the first time.