Actuarial Value and Employer-Sponsored Insurance. Summary


According to this preliminary analysis, the vast majority — at least approximately 98 percent — of enrollees in ESI are enrolled in plans that meet and exceed an AV of 60 percent whether a hybrid or internal approach is utilized to assess AV.  Because there are so few individuals in plans with AVs below 60 percent when assessed against a relatively broad package of services, and because services such as hospital, physician, and pharmacy benefits account for such a large fraction of the spending in the relatively broad package, the choice of a broader or narrower package of services as a benchmark in the AV calculation using the hybrid approach has little effect on the estimated fraction of people in plans with an AV below 60 percent.  Plans with benchmark AVs falling below 60 percent are likely PPO plans with high deductibles, in which most individuals do not reach the annual deductible, or so-called mini-med plans, which have low annual limits.

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