PROCEEDINGS May 15, 16, 17, 18, 2005 - Casualty Actuarial Society

ESTIMATING THE WORKERS COMPENSATION TAIL 677APPENDIX EQUANTIFYING THE ELDER CARE COST BULGETable E.1 discloses summarized data behind Figure 7.1. Theincremental paid amounts in the second column of Table E.1have been adjusted to a 2003 cost level assuming a constant9% per year rate of medical cost escalation. The incrementalamounts included in these totals were for accident years from1945 on, during calendar years 1991 through 2003. These havebeen totaled for groupings of five successive development years.The claim counts in the third column of Table E.1 are on adifferent basis than in the rest of this paper in order to focusonly on severity changes for claims where ongoing medical paymentsare being made. Consequently, these counts only includeclaims where some medical payment was made during the givencalendar year.The magnitude of the increases in on-level incremental severitiesfor later DYs shown in Figure 1.2 is greater than if thenumber of prior open counts was used. This is because the percentageof MPD claims for which payment activity occurs tendsto decline somewhat for later DYs. This decline indicates thatTABLE E.1Incremental Paid Severities at 2003 LevelDevelopment Years Incremental Paid Claims with Payment Incremental Paid(DYs) ($000s) Activity Severity16—20 537,626 99,417 5,40821—25 406,047 73,876 5,49626—30 318,881 50,646 6,29631—35 243,062 29,068 8,36236—40 129,420 14,486 8,93441—45 60,487 7,429 8,14246—50 38,960 3,674 10,60451—55 22,674 1,919 11,816