Question

ABC Health Insurance Inc. offers three different types of plans. Following is the performance of the plans for the year 2019.

1. Comprehensive plan:  Profit on this plan is $ 3.5 million, marketing cost $0.5 million, and plan paid $37 million for medical expenses of its subscribers
2. High Deductible Health Savings Plan:  Profit on this plan is $ 3.4 million, marketing cost $0.1 million, and plan paid $20 million for medical expenses of its subscribers
3. Indemnity Plan:  Profit on this plan is $ 1.5 million, marketing cost $1 million, and plan paid $13 million for medical expenses of its subscribers

The overall administration charges were $5 million. The total premium is sum of profit, administrative cost, marketing cost, and medical expenses. The medical loss ratio for all the plans combined for ABC company is approximately:

		78.5%
		85%
		90%
		82.5%

Answer 1

Medical Loss Ratio for all the plans combined is as follows :-