This doctoral dissertation reveals an approach to creating powerful actuarial pricing, underwriting rating, medical management profiling, and healthcare professional payments according to member risk characteristics. This study evaluated members within a large health insurer to determine whether a risk-adjusted regression approach could improve upon general actuarial approaches to modeling healthcare costs, profiling members for medical management interventions, and using the results to develop more robust and accurate premium rates. This dissertation can also serve as a powerful training and reference book for any health insurer, medical management group, physician practice, hospital, and other health care professional interested in understanding the inner workings of actuarial methods.