Gilliam & Snader 3 - Excess and Ded rating

Question 1

Why the entire medical pure premium is not eliminated in the Ex-Med coverage?

Answer 1

1. selection of ex-medical coverage will likely be adverse to the insurer
2. payment of certain medical costs may be required even though policy is ex-medical
3. the insurer retains the obligation to pay medical loss in the event the employer is unable to pay