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AHIP Exam AHM-520 Topic 5 Question 109 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 109
Topic #: 5
[All AHM-520 Questions]

The Fiesta Health Plan prices its products in such a way that the rates for its products are reasonable, adequate, equitable, and competitive. Fiesta is using blended rating to calculate a premium rate for the Murdock Company, a large employer. Fiesta has assigned a credibility factor of 0.6 to Murdock. Fiesta has also determined that Murdock's manual rate is $200 PMPM and that Murdock's experience rate is $180 PMPM.

According to regulations, Fiesta's premium rates are reasonable if they

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