Experience rating methods can be either prospective or retrospective.

A health plan typically can expect much higher profit levels from using retrospective experience rating rather than prospective experience rating a health plan using prospective experience rating is more likely than a

Health plan using retrospective experience rating to have to pay an experience rating dividend if a group's experience has been better than expected during the rating period

The premium determined under retrospective experience rating is usually higher than the premium under prospective experience rating

Most states require HMOs to use retrospective experience rating rather than prospective experience rating