Question 1

The following statements illustrate the use of different rating methods by health plans: The Dover health plan established rates for small groups by using a rating method which requires that the average premium in each group cannot be more than 120% of the average premium for any other group. Under this method, all members of each group pay the same premium, which is based on the experience of the group.Under the rating method used by the Rolling Hills health plan, the health plan calculates the ratio of a group's experience to the group's historical manual rate. Rolling Hills then multiplies this ratio by the group's future manual rate. Rolling Hills cannot consider the group's experience in determining premium rates. From the following answer choices, select the response that correctly indicates the rating methods used by Dover and Rolling Hills.

Options :

A : Dover = modified community ratingRolling Hills = factored rating

B : Dover = modified community ratingRolling Hills = adjusted community rating (ACR)

C : Dover = community rating by class (CRC)Rolling Hills = factored rating

D : Dover = community rating by class (CRC)Rolling Hills = adjusted community rating (ACR)

Answer: D

Question 2

A health plan's costs can be classified as committed costs or discretionary costs. An example of a discretionary cost for a health plan is the cost of its:

Options :

A : Facilities

B : Executive salaries

C : Employee training

D : Equipment

Answer: A

Question 3

Companies typically produce three types of budgets: operational budgets, cash budgets, and capital budgets. The following statements are about operational budgets. Select the answer choice containing the correct statement.

Options :

A : Expense budgets, a type of operational budget, typically describe fixed expenses rather than variable expenses.

B : Operational budgets can only show information by department or by line of business.

C : Operational budgets begin with a forecast of sales revenue and investment income.

D : Revenue budgets, a type of operational budget, indicate the amount of income from operations that a company received from the previous budget period

Answer: C

Question 4

Julio Benini is eligible to receive healthcare coverage through a health plan that is under contract to his employer. Mr. Benini is seeking coverage for the following individuals:Elena Benini, his wife -Maria Benini, his 18-year-old unmarried daughterJohann Benini, his 80-year-old father who relies on Julio for support and maintenanceThe health plan most likely would consider that the definition of a dependent, for purposes of healthcare coverage, applies to:

Options :

A : Elena, Maria, and Johann

B : Elena and Maria only

C : Elena only

D : Maria only

Answer: B

Question 5

The following statements are about the financial risks for health plans in Medicare and Medicaid markets. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

Options :

A : One reason that health plans in the Medicare and Medicaid markets experience financial risk is that government regulations determine which services must be provided to Medicare and Medicaid enrollees.

B : Effective use of hospital utilization is the single most likely factor to contribute to the success of a Medicare-contracting health plan.

C : If a Medicare-contracting health plan is a provider-sponsored organization (PSO), it is prohibited from sharing financial risk with its providers.

D : Typically, providers are more reluctant to accept financial risk in connection with providing services to the Medicaid population than with providing services to the Medicare population.

Answer: C

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