How to Calculate Actuarial Value

A high actuary value saves the customer money when services are purchased.

The actuary value is the portion of cost paid by a cost-sharing plan such as health insurance. It is an important piece of information when shopping for health insurance and other cost-sharing services.To calculate the actuary value, the total amount paid by the plan and the total amount paid separately by the plan members, such as co-payments must be known. Costs of participating in the plan such as premium rates are not used to calculate the actuary value.

Instructions

1. Determine the full amount the company pays toward services for its customers. In the case of health care companies, this information is on the public record. A phone call to the company should furnish this information.

2. Determine the full cost of services for which customers submitted claims.

3. Divide the amount paid by the company by the total cost of claims. This number is the percentage of claim costs that the company paid.

References

• CHCF: Actuary Value: A Method for Comparing Health Plan Benefits