Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
When underwriting a large group health plan, an insurer is most likely to set premium rates based on:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Large groups are generally experience-rated: because the group is large, its past claims experience is statistically credible and predicts future costs, so premiums reflect the group's own history, industry, age and gender mix, and geographic area. Individual underwriting of each employee is not used for large-group medical coverage; the risk is evaluated at the group level. This aggregate claims-based approach is the core large-group underwriting consideration in the group medical expense objectives.
Why the other options are wrong
- B) Individual medical history of each employee is an individual-market or small-case consideration; large groups are rated on aggregate experience.
- C) Community rating that cannot reflect the group's own experience describes the small-group rating environment, not large-group experience rating.
- D) The owner's medical examination is irrelevant to rating a large employee group's premiums.
Memory hook
Big group = your own track record sets your rate. Small group = community rating; large group = experience rating.