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Opportunities for Health Actuaries

Opportunities for Health Actuaries. ASNY Career Day @ Columbia University January 9, 2011 Michael L. Frank, Aquarius Capital. Biography of Michael L. Frank. 24 Years - Life, Accident & Health Actuary Specialties – Insurance, HMO, Reinsurance & Employee Benefits

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Opportunities for Health Actuaries

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  1. Opportunities for Health Actuaries ASNY Career Day @ Columbia University January 9, 2011 Michael L. Frank, Aquarius Capital

  2. Biography of Michael L. Frank • 24 Years - Life, Accident & Health Actuary • Specialties – Insurance, HMO, Reinsurance & Employee Benefits • Services – Actuarial, Brokering, Underwriting, & Financial Analysis • Actuarial Credentials: ASA, FCA, MAAA, plus others • Actuarial Society of Greater NY, President (2011) • Other Actuarial Organization Activities • SOA Section Councils: Actuary of the Future, Entrepreneurial Actuarial, Reinsurance • Various NAIC/AAA/CCA Committees & Task Forces (e.g., Healthcare Reform) • Speak/Recruit at Industry Meetings, Publish Articles, Industry Committees • Other Credentials & Designations • Licensed life, accident and health broker (25+ states) • Licensed reinsurance intermediary & managing general underwriter • Listed Arbitrator for Reinsurance Association of America (RAA) • Associate, American College of Healthcare Executives (ACHE) • BS, University of Michigan, Mathematics & Statistics

  3. Definition of an Actuary • An actuary is a business professional who deals with the financial impact of risk and uncertainty. Actuaries provide expert assessments of financial security systems, with a focus on their complexity, their mathematics, and their mechanisms • Actuaries mathematically evaluate the likelihood of events and quantify the contingent outcomes in order to minimize losses, both emotional and financial, associated with uncertain undesirable events. Source: Wikipedia

  4. Health Insurance Products • Medical - Commercial, Medicaid, Medicare • Dental • Vision • Disability - Short Term & Long Term • Long Term Care • Critical Illness • Specialty Products • Accident Medical • Pet Insurance • Other - Travel Products, Cancellation Coverages

  5. Type of Health Companies • Health Maintenance Organizations (HMOs) • Aetna, Blue Cross, Cigna, Coventry, Humana, United, and many others • Insurance Carriers • Medical Provider Groups • Disease Management & Wellness Companies • Reinsurers/Retrocessionaires • Employer Groups (“Self-Funded”) • May have a Captive Insurance Company • Other Vendors • Managing General Underwriters (MGUs) • Third Party Administrators (TPAs) 5

  6. Health Insurance “Food Chain” • Employer contracts with carrier/HMO • Fully insured arrangement • Self-funded w/ or w/o reinsurance • Carrier/HMO’s administration options • Provided directly to employer • Outsourced to third party vendors • Vendors might take risk (capitation) • May buy reinsurance(s) • Reinsurer assumes risk from carrier • Multiple reinsurers/retrocessionaires • Opportunities for Actuaries

  7. Roles of the Health Actuary • Society of Actuaries’ Database: March 2010 • 3,610 identified as Health Actuaries by Primary Area of Practice • 2,554 belong to Health Section • Insurance Companies/HMOs, Consulting Firms, Regulators, Other • Traditional • Rate Development (Pricing) • Financial Reporting (Reserving) • Product Development • Compliance (Rate Filings) • Network Provider Contracting & Analysis • Underwriting Support • Reinsurance Purchasing & Finance • Other: Audits (e.g., Forensic Audits), Expert Witness, Regulators

  8. Insurance Department Actuaries • 164 actuaries (all disciplines) in 36 states (March 2010) • 42 health actuaries in 20 states • Many insurance departments will subcontract to third party actuaries (consultants) to evaluate health actuarial matters.

  9. Issues Today • Limited Resources • Affordable Health Insurance & Healthcare Inflation • Insurance Companies/HMOs need to sustain profitability • Health Care Reform • Patient Protection and Affordable Care Act (PPACA) enacted on 3/23/10 • Kaiser Family Foundation (www.kff.org) • My Health Guide (www.myhealthguide.com) • Municipal Retiree Health Benefits (GASB No. 43/45) • Government Accounting Standards Board (www.gasb.org)

  10. Actuarial Organizations (US) • Society of Actuaries (www.soa.org) • American Academy of Actuaries (www.actuary.org) • Conference of Consulting Actuaries (www.ccactuaries.org) • Casualty Actuarial Society (www.casact.org) • Joint Board for Enrollment of Actuaries (www.irs.gov) • Actuarial Society of Greater New York (www.goasny.org) • Other Actuarial Organizations & Clubs Worldwide 10

  11. Open Discussion & Questions Michael L. Frank, ASA, MAAA, FCA President & Actuary Aquarius Capital Phone: (914) 933-0063 E-Mail: michael.frank@aquariuscapital.com Website: www.aquariuscapital.com (Visit “Aquarius in the News” on Website)

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