The Easy Guide to
Actuarial Value
How Health Insurance Works
$
Premiums
Health
Insurer
$
Claims Payments
Some people cost a lot…
…and some cost a little
$
$
$
$
$
$
$
$
Insurance pays different amounts
for different people
$
BIG insurance
payment; patient
hit out-of-pocket
maximum
NO insurance
payment; deductible
not met
$
$
$
$
$
$
$
The Average of what insurance
$
pays is Actuarial Value
$
$
$
$
$
$
$
75%
But not just any “average”
$
$
$
$
$
$
45%
$
85%
$
Actuarial Value is the average
of a Standard Population
$
of both sick
and healthy enrollees
$
$
$
$
$
$
75%
$
What the plan pays for YOU,
could be more or less than $
Plan paid a lot
that average.
for this person
$
Plan paid nothing
for this person
$
$
$
$
$
75%
$