EXAMPLE II

Subpart 1. Use of actuarial equivalence test. A. Question: Is the following plan actuarially equivalent to any Minnesota qualified plan? Hospital: $170 per day, 365 days; 80 percent of miscellaneous extras, the cost of anesthesia is included. The policy does not pay for private room even if medically necessary. Surgery: $3,000 maximum surgical schedule. Add 15 percent for the administration of anesthesia. In hospital physicians calls: $25 per day - 365 day maximum Maternity: Any complications X-ray and lab tests (out of hospital): $500 maximum - unscheduled B. Answer (calculated January 1, 1985): test result is 1004 points. This plan is a Minnesota qualified plan number two. Subp. 2. Worksheet. Test for actuarial equivalence other than Medicare supplement plans. A. Worksheet. Major Medical Subpart of part 2740.9964 Benefit Basic Superimposed Comprehensive 1. Hospital room and board 275 2. Hospital extras (80 percent) 384 3. Surgery 189 4. Physician care; home, office 5. Physician care; hospital 33 6. Maternity 25 7. Diagnostic X-ray and lab 98 8. Drugs and medicine 9. Radioactive therapy 10. Nursing/convalescent facility 11. Home health care 12. Physical therapy 12. Oxygen 12. Prostheses 12. Durable medical equipment 12. Second opinion surgery 12. Home care nursing 12. Ambulance 13. Hospital room and board in full 14. All hospital expenses in full 15. Major medical maximums Subtotal reasonable and customary medical services 16. Deductible 16. Coinsurance Subtotal net of deductible and coinsurance 17. Adjust (comb. medical/dental ded.) 18. COB/No-fault 19. Limit on "out-of-pocket" expenses 20. Well baby care 21. Emergency and supplemental accident 22. Student dependents 23.-25. Superimposed major medical Grand Total 1004 Combined basic and superimposed XXX XXX Equivalent to Minnesota qualified plan number __2__ nonqualified ______ Date _ By _ B. Miscellaneous calculations. (1) Policy does not pay extra for private room even if medically necessary. Deduct three points from the 359. Since the ASP value in 1985 is 220, the number of points will be 356 times the ratio of 170 to 220 or 275.09 points. (2) The surgical table was evaluated as 3,680.02 points. The points not including administration of anesthesia is 206 times the ratio of 3680.02 to 4620.00 or 164.09 points. For administration of anesthesia, the points are 164 times .15 or 24.6 points. (3) Since the maximum per diem cost of in-hospital physicians calls is less than the cost for routine follow-up (24.20 times 1.08 or 26.14), subtract 14 points from the number of points for prevailing fee with 365-day maximum. The result is 35 points. Multiply the 35 points by the ratio of $25 to 26.14 or 33.47 points. (4) Since the ASP factor is 1.15, the $200 and $500 maximum shown in part 2740.9964 , subpart 7 is now 230 and 575 respectively. Thus the $500 maximum is 78.26 percent of the way between the two maximums. Therefore the point value equals 89 plus .7826 times (101-89) or 98.39 points.