experience rating(redirected from Experience Ratings)
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Etymology: L, experientia, testing, rata, proportion
a system used by insurance companies in the United States to set the premium to be paid by the insured on the basis of the risk to the company of providing the insurance. Experience rating may lead to very high malpractice premiums in some medical specialties, for the insurance company calculates the premium on the basis of settlements made in related malpractice cases during a specified period. Experience rating is also used to set annual membership health maintenance fees in organizations in which the cost of providing the services in a previous accounting period is used to determine the premiums for the next fiscal year.
experience ratingAn insurance rating method which predicts a group's future medical costs based on its past experience (i.e., the actual cost of providing healthcare coverage to the group during a given period of time based on the group's claim history). With experience rating, the insurer calculates the group's insurance premium based on its own—not the overall community's—experience.
1. A projection of the cost of an insurance policy (e.g., of a malpractice insurance policy) based on the claims history of the person or party seeking to be insured.
2. A calculation of future insurance payments based on historical data.
n a determination of the premium rate for a particular group partially or wholly on the basis of that group's own experience. Age, sex, use, and costs of services provided determine the premium.