RMI exam 3- topic 8

[Topic 8-58] (Exactly One Correct Answer) Which of the following correctly describes captiation?

A) Providers receive a fixed amount per patient over a specified timeframe.

B) A single payment is made for a defined episode of care.

C) Providers are paid separately for each service rendered.

D) Providers are allocated a fixed sum to a specific population over a set period.

A) Providers receive a fixed amount per patient over a specified timeframe.

[Topic 8-49] Which of the following best illustrate the principal-agent problem in healthcare?

A) A doctor prescribes a medication and enrolls the patient in a drug management program that the clinic runs, which includes regular check-ups and monitoring, without discussing other management options that could be more convenient or cost-effective for the patient.

B) A general practitioner refers a patient to a specialist for a complex condition. The specialist is part of the same healthcare network but is not necessarily the closest or the most cost-effective option for the patient.

C) A patient complains of back pain, and their doctor, who owns an imaging center, immediately orders an MRI at their facility before trying any other forms of treatment such as physical therapy.

D) A patient is given a choice by their doctor between two effective medications for their condition: one is a newer, more expensive drug, while the other is an older, cheaper medication that has been on the market for years. The doctor explains the pros and cons of each and lets the patient decide.

E) None of the above

A) A doctor prescribes a medication and enrolls the patient in a drug management program that the clinic runs, which includes regular check-ups and monitoring, without discussing other management options that could be more convenient or cost-effective for the patient.

B) A general practitioner refers a patient to a specialist for a complex condition. The specialist is part of the same healthcare network but is not necessarily the closest or the most cost-effective option for the patient.

C) A patient complains of back pain, and their doctor, who owns an imaging center, immediately orders an MRI at their facility before trying any other forms of treatment such as physical therapy.

[Topic 8-59] (Exactly One Correct Answer) Which of the following correctly describes fee-for-service?

A) Insurers pay a percentage of the provider’s billed charges for services rendered.

B) Providers are paid separately for each service rendered.

C) Providers are rewarded or penalized based on performance metrics like patient outcomes or quality indicators.

D) Providers receive a fixed amount per patient over a specified timeframe.

B) Providers are paid separately for each service rendered.

[Topic 8-63] Which of the following is/are true about the Medicare program?

A) Medicare Part C allows Medicare beneficiaries to enroll with the private market.

B) Medicare is run as a federal-state partnership.

C) Medicare Part B is compulsory medical insurance.

D) Medicare Part A is voluntary hospital insurance.

E) None of the above.

A) Medicare Part C allows Medicare beneficiaries to enroll with the private market.

[Topic 8-30] (Exactly One Correct Answer) CDHPs encourage lower prices for non-pharmaceutical, routine healthcare through

A) Price Competition between doctors.

B) Negotiation between the government and insurers.

C) Negotiation between doctors and insurers.

D) Price Competition between insurers

A) Price Competition between doctors.

[Topic 8-53] Where does moral hazard show up in the production of healthcare?

A) When insurers pay healthcare providers claims for services rendered to patients.

B) When sponsors pay premiums to insurers or third-party payers.

C) When patients pay premiums to insurers.

D) When healthcare providers provide services to patients.

E) None of the above.

D) When healthcare providers provide services to patients.

[Topic 8-50] Which of the following best illustrate the principal-agent problem in healthcare?

A) A dermatologist diagnoses a patient with eczema and prescribes a generic topical steroid along with educational materials about managing the condition through lifestyle changes and over-the-counter products.

B) A patient visits their doctor with symptoms of diabetes. After a thorough examination and blood tests, the doctor diagnoses the patient with type 2 diabetes and prescribes a standard course of metformin, a widely-used and affordable medication.

C) A patient who requires hip replacement surgery is presented with various implant options by their surgeon. The surgeon provides detailed information about the risks and benefits of each type and leaves the final decision to the patient.

D) A patient with chronic pain is advised by their doctor to consider several treatment options, including medication, physical therapy, or acupuncture. The doctor provides referrals for each treatment modality without showing any preference.

E) None of the above

E) None of the above

[Topic 8-85] Where does moral hazard show up in the reimbursement of healthcare?

A) When insurers pay healthcare providers claims for services rendered to patients.

B) When patients pay premiums to insurers.

C) When sponsors pay premiums to insurers or third-party payers.

D) When healthcare providers provide services to patients.

E) None of the above.

A) When insurers pay healthcare providers claims for services rendered to patients.

[Topic 8-6] Which of the following is (are) TRUE concerning Consumer Driven Health Plans?

A) CDHPs are associated with a low deductible health plan.

B) CDHPs are associated with the ‘use-it-or-lose-it’ rule.

C) CDHPs provide strong incentives for an insured to ask questions about price.

D) CDHPs provide catastrophic health insurance coverage.

E) None of the above.

C) CDHPs provide strong incentives for an insured to ask questions about price.

D) CDHPs provide catastrophic health insurance coverage.

[Topic 8-55] Where does adverse selection show up in the financing of healthcare?

A) When sponsors pay premiums to insurers or third-party payers.

B) When patients pay premiums to insurers.

C) When healthcare providers provide services to patients.

D) When insurers pay healthcare providers claims for services rendered to patients.

E) None of the above

A) When sponsors pay premiums to insurers or third-party payers.

B) When patients pay premiums to insurers.

[Topic 8-5] (Exactly One Correct Answer) A patient has a health insurance plan with a $1,000 deductible, 20% coinsurance, and a $5,000 out-of-pocket maximum. The patient incurs a medical expense of $7,000. How much will the patient pay?

A) $7,000

B) $1,200

C) $5,000

D) $2,200

D) $2,200

[Topic 8-64] Which of the following is/are true about Medicare Part A?

A) It is a compulsory hospital insurance program with four broad categories of coverage.

B) It offers prescription drug coverage to traditional Medicare enrollees.

C) It is part of traditional Medicare.

D) It includes voluntary supplemental medical insurance for outpatient services.

E) None of the above.

A) It is a compulsory hospital insurance program with four broad categories of coverage.

C) It is part of traditional Medicare.

[Topic 8-47] Which of the following best illustrate the principal-agent problem in healthcare?

A) A healthcare provider recommends an additioanl series of diagnostic tests for the patient’s condition, even though the patient’s symptoms do not warrant them. The clinic receives additional payments for the number of tests administered.

B) A patient decides to undergo an elective cosmetic procedure. They have researched and chosen the procedure themselves, and the healthcare provider performs the service upon their request.

C) An insurance company decides to increase the copay for certain medications without notifying the healthcare providers who frequently prescribe these medications.

D) A doctor prescribes a brand name medication whe a generic version is available. The doctor has shares in the company that produces the name-brand medication.

E) None of the above.

A) A healthcare provider recommends an additioanl series of diagnostic tests for the patient’s condition, even though the patient’s symptoms do not warrant them. The clinic receives additional payments for the number of tests administered.

D) A doctor prescribes a brand name medication whe a generic version is available. The doctor has shares in the company that produces the name-brand medication.

[Topic 8-44] (Exactly One Correct Answer) Which of the following best describes the third-party payer in a healthcare system?

A) An entity responsible for paying some or all of the costs associated with medical services.

B) A government body that regulates healthcare costs.

C) An individual who pays for their own healthcare services.

D) An entity that provides medical services to patients.

A) An entity responsible for paying some or all of the costs associated with medical services.

[Topic 8-41] (Exactly One Correct Answer) Lorna is a young, health woman who makes $40,000 a year and is not able to save. She is considering having a child in the next year. She is trying to determine what type of health insurance policy to get. Based on the information, what should she get?

A) PPO since she cannot update her policy in the middle of the year.

B) CDHP since she cannot update her policy in the middle of the year.

C) PPO since she can update her policy during the year.

D) CDHP since she can update her policy during the year.

C) PPO since she can update her policy during the year.

[Topic 8-73] (Exactly One Correct Answer) Which of the following correctly describes fee-for-service?

A) Providers are rewarded or penalized based on performance metrics like patient outcomes or quality indicators.

B) Providers receive a fixed amount per patient over a specified timeframe.

C) Insurers pay a percentage of the provider’s billed charges for services rendered.

D) Providers are paid separately for each service rendered.

D) Providers are paid separately for each service rendered.

[Topic 8-7] Which of the following is NOT a provision of the Affordable Care Act (ACA) as originally written?

A) Expanding Medicaid coverage to more low-income individuals

B) Requiring individuals to have health insurance

C) Providing tax credits to help individuals and families afford health insurance premiums

D) Allowing young adults to remain on their parents’ health insurance until age 26

E) None of the above.

E) None of the above.

[Topic 8-51] Which of the following best illustrate the principal-agent problem in healthcare?

A) A primary care doctor refers patients to a specialist who is part of the same medical group, despite there being several more qualified specialists in the area. The medical group has a policy that financially rewards doctors for keeping referrals within the group.

B) A surgeon recommends a particular type of invasive surgery for a condition that is often treated with less invasive methods. The surgeon receives a higher reimbursement from insurance companies for performing this type of surgery compared to the less invasive options.

C) A physician prescribes a specific brand of medication to a patient, despite there being a generic alternative that is equally effective.

D) A doctor routinely orders extensive and expensive full-body CT scans for patients who come in with minor complaints that typically do not warrant such procedures.

E) None of the above.

A) A primary care doctor refers patients to a specialist who is part of the same medical group, despite there being several more qualified specialists in the area. The medical group has a policy that financially rewards doctors for keeping referrals within the group.

B) A surgeon recommends a particular type of invasive surgery for a condition that is often treated with less invasive methods. The surgeon receives a higher reimbursement from insurance companies for performing this type of surgery compared to the less invasive options.

C) A physician prescribes a specific brand of medication to a patient, despite there being a generic alternative that is equally effective.

D) A doctor routinely orders extensive and expensive full-body CT scans for patients who come in with minor complaints that typically do not warrant such procedures.

[Topic 8-56] Where does adverse selection show up in the production of healthcare?

A) When healthcare providers provide services to patients.

B) When patients pay premiums to insurers.

C) When sponsors pay premiums to insurers or third-party payers.

D) When insurers pay healthcare providers claims for services rendered to patients.

E) None of the above.

E) None of the above.

[Topic 8-54] Where does moral hazard show up in the reimbursement of healthcare?

A) When sponsors pay premiums to insurers or third-party payers.

B) When insurers pay healthcare providers claims for services rendered to patients.

C) When healthcare providers provide services to patients.

D) When patients pay premiums to insurers.

E) None of the above.

B) When insurers pay healthcare providers claims for services rendered to patients.

Topic 8-84] Where does moral hazard show up in the production of healthcare?

A) When sponsors pay premiums to insurers or third-party payers.

B) When patients pay premiums to insurers.

C) When insurers pay healthcare providers claims for services rendered to patients.

D) When healthcare providers provide services to patients.

E) None of the above.

D) When healthcare providers provide services to patients.

[Topic 8-25] (Exactly One Correct Answer) All of the following would be considered historic disadvantages of HMOs as compared to traditional indemnity plans EXCEPT:

A) Patients have no coverage for out-of-network services.

B) Patients have a gatekeeper to refer them to specialists and hospitals.

C) Patients cannot see specialists (such as cardiologists) in their first year of enrollment in the HMO.

D) Patients may have to change providers to join the HMO

C) Patients cannot see specialists (such as cardiologists) in their first year of enrollment in the HMO.

[Topic 8-1] The Affordable Care Act requires insurers operating in the exchanges to use 3:1 rating bands between older individuals and younger individuals respectively when pricing insurance coverage. Previously, insurers used 5:1 rating bands. What is the impact of this requirement?

A) Reduced adverse selection.

B) Increased Adverse Selection

C) Increased premiums for younger individuals.

D) Increased premiums for older individuals.

E) None of the above.

B) Increased Adverse Selection

C) Increased premiums for younger individuals.

[Topic 8-36] What are the characteristics of an FSA?

A) It rolls over annually.

B) It can be used for non-medical expenses.

C) There is an investment component.

D) It is owned by the employer.

E) None of the above.

D) It is owned by the employer.

[Topic 8-77] What is the primary issue that arises from the interaction of patients, providers and payers in the three party system in healthcare?

A) Adverse selection.

B) Morale hazard.

C) Advantageous selection.

D) Moral hazard.

E) None of the above

A) Adverse selection.

D) Moral hazard.

[Topic 8-27] In a PPO, which of the following statements is (are) TRUE?

A) Insureds who use providers out of the PPO network have no coverage.

B) Providers are paid via “negotiated fee for service.”

C) Providers are at financial risk for overutilization.

D) Insureds who use providers out of the PPO network have some coverage.

E) None of the above.

B) Providers are paid via “negotiated fee for service.”

D) Insureds who use providers out of the PPO network have some coverage.

[Topic 8-60] Which of the following correctly explains how CDHPs work?

A) Combine flexible spending accounts with high-deductible plans.

B) Combine healthcare maintenance organizations with high-deductible plans

C) Combine health savings accounts with high-deductible plans

D) Provide catastrophic coverage for the consumer

E) None of the above.

C) Combine health savings accounts with high-deductible plans

D) Provide catastrophic coverage for the consumer

[Topic 8-45] (Exactly One Correct Answer) The principal-agent problem in healthcare refers to which of the following scenarios?

A) Sponsors are unaware of the actual costs of the healthcare services they finance.

B) Patients unable to choose their healthcare provider.

C) Providers are not acting in the best interest of the payer who hires them.

D) Third-party payers have more information than the patients they insure.

C) Providers are not acting in the best interest of the payer who hires them.

[Topic 8-81] Which of the following best illustrate the principal-agent problem in healthcare?

A) A dermatologist diagnoses a patient with eczema and prescribes a generic topical steroid along with educational materials about managing the condition through lifestyle changes and over-the-counter products.

B) A patient who requires hip replacement surgery is presented with various implant options by their surgeon. The surgeon provides detailed information about the risks and benefits of each type and leaves the final decision to the patient.

C) A patient with chronic pain is advised by their doctor to consider several treatment options, including medication, physical therapy, or acupuncture. The doctor provides referrals for each treatment modality without showing any preference.

D) A patient visits their doctor with symptoms of diabetes. After a thorough examination and blood tests, the doctor diagnoses the patient with type 2 diabetes and prescribes a standard course of metformin, a widely-used and affordable medication.

E) None of the above.

E) None of the above.

[Topic 8-43] (Exactly One Correct Answer) What role do premiums play in a healthcare system?

A) They are taxes collected by the government to fund public healthcare.

B) They are fixed payments made to providers for each service rendered.

C) They are out-of-pocket payments made by patients for services received.

D) They are the amounts paid by sponsors to third-party payers for healthcare coverage.

D) They are the amounts paid by sponsors to third-party payers for healthcare coverage.

[Topic 8-34] A patient with a chronic condition avoids seeking necessary medical care because it is difficult to find a doctor. This is an example of:

A) Adverse selection

B) A death spiral

C) Moral Hazard

D) None of the above.

D) None of the above.

[Topic 8-88] Where does adverse selection show up in the reimbursement of healthcare?

A) When sponsors pay premiums to insurers or third-party payers.

B) When patients pay premiums to insurers.

C) When insurers pay healthcare providers claims for services rendered to patients.

D) When healthcare providers provide services to patients.

E) None of the above.

E) None of the above.

[Topic 8-22] (Exactly One Correct Answer) General Motors (who make Cadillacs) pays for individual (not family) health insurance for an employee as part of a generous employee benefit plan. The premium for this coverage is $16,000. Suppose this employee is in a 30% tax bracket for federal income tax purposes. What would be the income tax liability for this employee as a result of receiving this health insurance from their employer?

A) $6,400.

B) $1,600.

C) $8,571.

D) $0.

D) $0.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible and a $10,000 OOP Max. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

[Topic 8-13] (Exactly One Correct Answer) Archer suffers from tinnitus (a medical condition of the ear) and has to see a doctor for treatment. The total cost of the visit is $300. How much does The Figgis Agency pay? This is Archer’s first health expenditure of the year.

A) $80.

B) $600.

C) $0.

D) $300.

C) $0.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible and a $10,000 OOP Max. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

[Topic 8-14] (Exactly One Correct Answer) Later in the same year, Archer is attacked by an ocelot (a large, spotted cat with tufted ears often kept as an exotic pet) and has to be treated for the wounds. The treatment cost $1300. How much does Archer pay?

A) $100.

B) $420.

C) $80.

D) $0.

B) $420.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible and a $10,000 OOP Max. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

[Topic 8-15] (Exactly One Correct Answer) The following year, Archer is shot (by a coworker named Lana) during a particularly difficult mission. He is rushed into emergency surgery and makes a miraculous recovery. The total expenses in saving Archer’s life are $100,000. How much does Archer pay?

A) $20,400.

B) $20,000.

C) $10,000.

D) $20,500

C) $10,000.

[Topic 8-82] Which of the following best illustrate the principal-agent problem in healthcare?

A) A doctor routinely orders extensive and expensive full-body CT scans for patients who come in with minor complaints that typically do not warrant such procedures.

B) A surgeon recommends a particular type of invasive surgery for a condition that is often treated with less invasive methods. The surgeon receives a higher reimbursement from insurance companies for performing this type of surgery compared to the less invasive options.

C) A physician prescribes a specific brand of medication to a patient, despite there being a generic alternative that is equally effective.

D) A primary care doctor refers patients to a specialist who is part of the same medical group, despite there being several more qualified specialists in the area. The medical group has a policy that financially rewards doctors for keeping referrals within the group.

E) None of the above.

A) A doctor routinely orders extensive and expensive full-body CT scans for patients who come in with minor complaints that typically do not warrant such procedures.

B) A surgeon recommends a particular type of invasive surgery for a condition that is often treated with less invasive methods. The surgeon receives a higher reimbursement from insurance companies for performing this type of surgery compared to the less invasive options.

C) A physician prescribes a specific brand of medication to a patient, despite there being a generic alternative that is equally effective.

D) A primary care doctor refers patients to a specialist who is part of the same medical group, despite there being several more qualified specialists in the area. The medical group has a policy that financially rewards doctors for keeping referrals within the group.

[Topic 8-24] Which of the following is (are) TRUE concerning traditional indemnity plans?

A) The role of the insurer is to manage care.

B) The insured may receive services from any doctor or hospital and receive reimbursement.

C) The role of the insurer is to indemnify the insured.

D) The insured must receive services from a network of doctors if they want to be reimbursed.

E) None of the above.

B) The insured may receive services from any doctor or hospital and receive reimbursement.

C) The role of the insurer is to indemnify the insured.

[Topic 8-3] (Exactly One Correct Answer) A patient has a health insurance plan with a $750 deductible, 10% coinsurance, and a $3,000 out-of-pocket maximum. The patient incurs a medical expense of $8,000. How much will the patient pay?

A) $1475

B) $3000

C) $750

D) $725

A) $1475

[Topic 8-37] What are the characteristics of an HSA?

A) In some cases it can be used for non-medical expenses.

B) It is owned by the employer.

C) It must be used by the end fo the year or is forfeit.

D) There is an investment component.

E) None of the above.

A) In some cases it can be used for non-medical expenses.’

D) There is an investment component.

[Topic 8-69] (Exactly One Correct Answer) What created Medicare and Medicaid?

A) Social Security Amendments Act

B) Hill-Burton Act.

C) Kerr-Mills Act.

D) Comprehensive Health Insurance Act

A) Social Security Amendments Act

[Topic 8-80] Which of the following best illustrate the principal-agent problem in healthcare?

A) A patient is given a choice by their doctor between two effective medications for their condition: one is a newer, more expensive drug, while the other is an older, cheaper medication that has been on the market for years. The doctor explains the pros and cons of each and lets the patient decide.

B) A general practitioner refers a patient to a specialist for a complex condition. The specialist is part of the same healthcare network but is not necessarily the closest or the most cost-effective option for the patient.

C) A doctor prescribes a medication and enrolls the patient in a drug management program that the clinic runs, which includes regular check-ups and monitoring, without discussing other management options that could be more convenient or cost-effective for the patient.

D) A patient complains of back pain, and their doctor, who owns an imaging center, immediately orders an MRI at their facility before trying any other forms of treatment such as physical therapy.

E) None of the above.

B) A general practitioner refers a patient to a specialist for a complex condition. The specialist is part of the same healthcare network but is not necessarily the closest or the most cost-effective option for the patient.

C) A doctor prescribes a medication and enrolls the patient in a drug management program that the clinic runs, which includes regular check-ups and monitoring, without discussing other management options that could be more convenient or cost-effective for the patient.

D) A patient complains of back pain, and their doctor, who owns an imaging center, immediately orders an MRI at their facility before trying any other forms of treatment such as physical therapy.

[Topic 8-39] (Exactly One Correct Answer) Sean is trying to decide between health insurance plans. He only cares about having the lowest premium. Which plan should he choose?

A) HMO

B) CDHP

C) Traditional indemnity

D) PPO

B) CDHP

[Topic 8-76] (Exactly One Correct Answer) The principal-agent problem in healthcare refers to which of the following scenarios?

A) Third-party payers have more inforamtion than the patients they insure.

B) Providers are not acting in the best interest of the payer who hires them.

C) Patients unable to choose their healthcare provider.

D) Sponsors are unaware of the actual costs of the healthcare services they finance.

B) Providers are not acting in the best interest of the payer who hires them.

Topic 8-68] Which of the following is/are true about Blue Cross?

A) It started as a medical service plan.

B) It developed out of the Baylor Plan from the American Hospital Association.

C) Premiums were orginally experience rated.

D) Premiums were originally community rated.

E) None of the above.

B) It developed out of the Baylor Plan from the American Hospital Association.

D) Premiums were originally community rated.

[Topic 8-20] The main feature or distinguishing characteristic of an POS as compared to a PPO plan is:

A) There are networks of doctors.

B) Premiums for POSs are less than for PPOs.

C) PCPs are at financial risk for overutilization of health care.

D) Out-of-network providers are paid on a capitation basis in an POS.

E) None of the above.

B) Premiums for POSs are less than for PPOs.

C) PCPs are at financial risk for overutilization of health care.

[Topic 8-75] (Exactly One Correct Answer) Which of the following best describes the third-party payer in a healthcare system?

A) A government body that regulates healthcare costs.

B) An entity responsible for paying some or all of the costs associated with medical services.

C) An individual who pays for their own healthcare services.

D) An entity that provides medical services to patients.

B) An entity responsible for paying some or all of the costs associated with medical services.

[Topic 8-57] Where does adverse selection show up in the reimbursement of healthcare?

A) When healthcare providers provide services to patients.

B) When insurers pay healthcare providers claims for services rendered to patients.

C) When patients pay premiums to insurers.

D) When sponsors pay premiums to insurers or third-party payers.

E) None of the above.

E) None of the above.

[Topic 8-33] Which of the following scenarios is an example of moral hazard in healthcare?

A) A patient with a low-risk lifestyle chooses a high-deductible health insurance plan because they know they are unlikely to need extensive medical care.

B) A patient hides information about their medical history to obtain a lower insurance premium.

C) A patient refuses to undergo a test ordered by a doctor and cites cost-sharing.

D) A patient with a pre-existing condition chooses not to purchase health insurance because they know they will be accepted into the high-risk pool regardless.

E) None of the above.

E) None of the above.

[Topic 8-86] Where does adverse selection show up in the financing of healthcare?

A) When healthcare providers provide services to patients.

B) When patients pay premiums to insurers.

C) When insurers pay healthcare providers claims for services rendered to patients.

D) When sponsors pay premiums to insurers or third-party payers.

E) None of the above.

B) When patients pay premiums to insurers.

D) When sponsors pay premiums to insurers or third-party payers.

[Topic 8-16] The ORIGINAL VERSION of the ACA contains several mandates. Which of the following is NOT ONE?

A) Emergency Departments cannot turn away patients due to inability to pay.

B) Large employers must offer affordable coverage.

C) Insurance contracts must cover essential health benefits.

D) Individuals must purchase minimum essential coverage.

E) None of the above

A) Emergency Departments cannot turn away patients due to inability to pay.

[Topic 8-42] Michael is a 63 year old man who makes $80,000 a year. He has a CDHP from his employer. He is diagnosed with cancer. What should he do?

A) Update his existing policy to a POS under a qualifying life event.

B) Update his existing policy to a PPO under a qualifying life event.

C) Enroll in Medicaid.

D) Enroll in Medicare.

E) None of the above.

E) None of the above.

[Topic 8-21] (Exactly One Correct Answer) The employer mandate under the ACA requires employers to offer health insurance coverage which:

A) Has an actuarial value of 60% [Bronze Plan].

B) Is purchased through the exchanges.

C) Is affordable to employees.

D) Is affordable to employers.

C) Is affordable to employees.

[Topic 8-29] (Exactly One Correct Answer) Medicaid covers and . Medicare covers and

A) Poor children and Nursing Homes; People over 65 and Dialysis.

B) Poor Children and Dialysis; People over 65 and Nursing Homes.

C) People over 65 and Poor Children; Dialysis and Nursing Homes.

D) People over 65 and Dialysis; Poor Children and Nursing Homes.

A) Poor children and Nursing Homes; People over 65 and Dialysis.

[Topic 8-74] (Exactly One Correct Answer) Which of the following best describes the three elements common to all healthcare systems?

A) Physicians, Nurses and Administrators

B) Hospitals, Medications, and Insurance

C) Government, Private Sector, and Non-Profits

D) Payers, Patients, and Providers

D) Payers, Patients, and Providers

[Topic 8-48] Which of the following best illustrate the principal-agent problem in healthcare?

A) A patient is advised by their doctor to undergo a knee replacement surgery. The doctor recommends a specific brand of prosthetic joint that is more expensive than others on the market. The doctor is known to attend medical conferences sponsored by the manufacturer of the recommended prosthetic.

B) An insurance company implements a new policy that requires pre-authorization for certain medical tests. A doctor, unaware of this new policy, orders a standard test for a patient, which is later denied by the insurance company for lack of pre-authorization.

C) A patient with high blood pressure is advised by their doctor to start medication. The doctor provides options between several medications, including generic and brand-name drugs, and discusses the potential side effects and costs of each.
D) A dentist recommends orthodontic work for a teenager. The dentist also provides the service of orthodontics and stands to profit from the procedure. There is no clear indication that the teenager needs braces immediately, as the dental issues are cosmetic.

E) None of the above.

A) A patient is advised by their doctor to undergo a knee replacement surgery. The doctor recommends a specific brand of prosthetic joint that is more expensive than others on the market. The doctor is known to attend medical conferences sponsored by the manufacturer of the recommended prosthetic.

D) A dentist recommends orthodontic work for a teenager. The dentist also provides the service of orthodontics and stands to profit from the procedure. There is no clear indication that the teenager needs braces immediately, as the dental issues are cosmetic.

[Topic 8-78] Which of the following best illustrate the principal-agent problem in healthcare?

A) A doctor prescribes a brand name medication whe a generic version is available. The doctor has shares in the company that produces the name-brand medication.

B) An insurance company decides to increase the copay for certain medications without notifying the healthcare providers who frequently prescribe these medications.

C) A healthcare provider recommends an additioanl series of diagnostic tests for the patient’s condition, even though the patient’s symptoms do not warrant them. The clinic receives additional payments for the number of tests administered.

D) A patient decides to undergo an elective cosmetic procedure. They have researched and chosen the procedure themselves, and the healthcare provider performs the service upon their request.

E) None of the above

A) A doctor prescribes a brand name medication whe a generic version is available. The doctor has shares in the company that produces the name-brand medication.

C) A healthcare provider recommends an additioanl series of diagnostic tests for the patient’s condition, even though the patient’s symptoms do not warrant them. The clinic receives additional payments for the number of tests administered.

[Topic 8-46] What is the primary issue that arises from the interaction of patients, providers and payers in the three party system in healthcare?

A) Advantageous selection.

B) Morale hazard.

C) Adverse selection.

D) Moral hazard.

E) None of the above.

C) Adverse selection.

D) Moral hazard.

[Topic 8-38] (Exactly One Correct Answer) The “Blues” are usually what kind of plan?

A) POS

B) HMO

C) PPO

D) Traditional indemnity

C) PPO

[Topic 8-79] Which of the following best illustrate the principal-agent problem in healthcare?

A) A patient with high blood pressure is advised by their doctor to start medication. The doctor provides options between several medications, including generic and brand-name drugs, and discusses the potential side effects and costs of each.

B) A patient is advised by their doctor to undergo a knee replacement surgery. The doctor recommends a specific brand of prosthetic joint that is more expensive than others on the market. The doctor is known to attend medical conferences sponsored by the manufacturer of the recommended prosthetic.

C) A dentist recommends orthodontic work for a teenager. The dentist also provides the service of orthodontics and stands to profit from the procedure. There is no clear indication that the teenager needs braces immediately, as the dental issues are cosmetic.

D) An insurance company implements a new policy that requires pre-authorization for certain medical tests. A doctor, unaware of this new policy, orders a standard test for a patient, which is later denied by the insurance company for lack of pre-authorization.

E) None of the above.

B) A patient is advised by their doctor to undergo a knee replacement surgery. The doctor recommends a specific brand of prosthetic joint that is more expensive than others on the market. The doctor is known to attend medical conferences sponsored by the manufacturer of the recommended prosthetic.

C) A dentist recommends orthodontic work for a teenager. The dentist also provides the service of orthodontics and stands to profit from the procedure. There is no clear indication that the teenager needs braces immediately, as the dental issues are cosmetic.

[Topic 8-26] An HMO combines which of the following parties in the third party payment system? (I) Payer/insurance function (II) Provider of health care goods and services (III) Patient/consumer

A) II

B) III

C) I

D) None of the above.

A) II

C) I

[Topic 8-87] Where does adverse selection show up in the production of healthcare?

A) When healthcare providers provide services to patients.

B) When patients pay premiums to insurers.

C) When sponsors pay premiums to insurers or third-party payers.

D) When insurers pay healthcare providers claims for services rendered to patients.

E) None of the above.

E) None of the above.

[Topic 8-67] Which of the following is/are true about why commerical insurance doubled during World War II?

A) The IRS incentivized employers by deducting employee benefits from taxable profits.

B) The National Labor Board incentivized this practice by including employer fringe benefits as employee wages.

C) Workers compensation laws were passed during this time to incentivize employers.

D) The IRS incentivized employees by ruling employer fringe benefits did not count as taxable wages although this was overturned.

E) None of the above.

A) The IRS incentivized employers by deducting employee benefits from taxable profits.

[Topic 8-65] Which of the following is/are true about Medicare Part B?

A) Physicians can balance bill patients.

B) It provides coverage for long-term care facilities and hospice care.

C) It offers a voluntary medical insurance program.

D) It is not part of traditional Medicare.

E) None of the above.

C) It offers a voluntary medical insurance program.

[Topic 8-66] Which of the following was a response to the healthcare payment challenges during the Great Depression?

A) Creation of Medicare and Medicaid

B) Development of HMOs

C) The Baylor Plan

D) ERISA

E) None of the above.

C) The Baylor Plan

[Topic 8-23] (Exactly One Correct Answer) The individual mandate under the ACA use to require individuals to:

A) Purchase coverage with an actuarial value of 90% [Gold coverage].

B) Have minimum essential coverage.

C) Pay 25% of the cost of health insurance coverage offered by their employer.

D) Purchase dependent coverage [e.g., spouses, children] offered through their employer

B) Have minimum essential coverage.

[Topic 8-70] Which of the following is/are examples of third-party payers?

A) BlueCross BlueShield

B) Pharmacy Benefit Managers

C) HealthEquity (i.e., company to manage HSA accounts)

D) Employee Assistance Programs

E) None of the above.

A) BlueCross BlueShield

B) Pharmacy Benefit Managers

C) HealthEquity (i.e., company to manage HSA accounts)

D) Employee Assistance Programs

[Topic 8-61] Which of the following correctly highlights a difference between HSAs and FSAs?

A) HSAs require account holders to spend all funds within the plan year, while FSAs allow funds to be rolled over indefinitely.

B) HSAs allow funds to be rolled over indefinitely, while FSAs require account holders to spend all funds within the plan year.

C) FSAs are only available to individuals enrolled in healthcare maintenance organizations whereas HSAs are available to everyone regardless of their insurance plan.

D) FSAs are only available to individuals enrolled in high-deductible health plans whereas HSAs are available to everyone regardless of their insurance plan.

E) None of the above.

B) HSAs allow funds to be rolled over indefinitely, while FSAs require account holders to spend all funds within the plan year.

69. [Topic 8-52] Where does moral hazard show up in the financing of healthcare?

A) When healthcare providers provide services to patients.

B) When insurers pay healthcare providers claims for services rendered to patients.

C) When sponsors pay premiums to insurers or third-party payers.

D) When patients pay premiums to insurers.

E) None of the above

E) None of the above

[Topic 8-18] The main feature or distinguishing characteristic of an HMO as compared to a POS plan is:

A) Premiums for HMOs are less than for POS.

B) PCPs are at financial risk for overutilization of health care.

C) Out-of-network providers are paid on a capitation basis in an HMO.

D) There are networks of doctors.

E) None of the above.

A) Premiums for HMOs are less than for POS.

[Topic 8-28] (Exactly One Correct Answer) Medicare covers and . Medicaid covers and

A) People over 65 and Poor Children; Dialysis and Nursing Homes. B) People over 65 and Nursing Homes; Poor Children and Dialysis. C) Poor Children and Dialysis; People over 65 and Nursing Homes. D) People over 65 and Dialysis; Poor Children and Nursing Homes.

D) People over 65 and Dialysis; Poor Children and Nursing Homes.

[Topic 8-62] Which of the following is/are true about the Medicare program?

A) Medicare Part B is voluntary hospital insurance.

B) Medicare was introduced with the social security program.

C) Medicare Part A is a voluntary supplemental insurance program.

D) Medicare Part D covers prescription drugs.
E) None of the above

D) Medicare Part D covers prescription drugs.

[Topic 8-72] (Exactly One Correct Answer) Which of the following correctly describes captiation?

A) A single payment is made for a defined episode of care.

B) Providers are paid separately for each service rendered.

C) Providers are allocated a fixed sum to a specific population over a set period.

D) Providers receive a fixed amount per patient over a specified timeframe.

D) Providers receive a fixed amount per patient over a specified timeframe.

[Topic 8-89] (Exactly One Correct Answer) Who is the largest financer of medical services in the U.S.?

A) Consumers through out-of-pocket payments.

B) Veteran’s Administration

C) Medicare and Medicaid

D) Private Health Insurance

C) Medicare and Medicaid

[Topic 8-2] (Exactly One Correct Answer) Suppose you have an insurance contract with a $500 deductible. If you have a loss of $700, how do you pay and how much does the insurance company pay?

A) You: $500. IC:$200.

B) You: $700. IC:$0.

C) You: $200. IC:$500.

D) You: $0. IC:$700

A) You: $500. IC:$200.

[Topic 8-4] (Exactly One Correct Answer) An individual has a health insurance plan with a $500 deductible, 30% coinsurance, and a $4,000 out-of-pocket maximum. If the individual incurs a medical expense of $2,500, how much will they pay?

A) $1500

B) $1100

C) $1000

D) $500

B) $1100

[Topic 8-71] Which of the following is/are examples of third-party payers?

A) United Healthcare

B) Aetna

C) University of Iowa Health Clinic

D) Centers for Medicare and Medicaid Services

E) None of the above.

A) United Healthcare

B) Aetna

D) Centers for Medicare and Medicaid Services

[Topic 8-40] (Exactly One Correct Answer) Moira is a young, healthy woman who makes $150,000 a year and is able to save. She is considering having a child in the next year. She is trying to determine what type of health insurance policy to get. Based on the information, what should she get?

A) CDHP since she can update her policy during the year.

B) PPO since she can update her policy during the year.

C) PPO since she cannot update her policy in the middle of the year.

D) CDHP since she cannot update her policy in the middle of the year.

A) CDHP since she can update her policy during the year.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

79. [Topic 8-8] (Exactly One Correct Answer) What does the 80/20 coinsurance provision mean?

A) Archer is responsible for 80% of healthcare costs after meeting the deductible.

B) Archer is responsible for 80% of the deductible.

C) Archer is responsible for 20% of healthcare costs after meeting the deductible.

D) Archer is responsible for 20% of the deductible.

C) Archer is responsible for 20% of healthcare costs after meeting the deductible.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

[Topic 8-9] (Exactly One Correct Answer) Archer suffers from tinnitus (a medical condition of the ear) and has to see a doctor for treatment. The total cost of the visit is $600. How much does The Figgis Agency pay? This is Archer’s first health expenditure of the year.

A) $600.

B) $80.

C) $120.

D) $0.

B) $80.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

[Topic 8-10] (Exactly One Correct Answer) Later in the same year, Archer is attacked by an ocelot (a large, spotted cat with tufted ears often kept as an exotic pet) and has to be treated for the wounds. The treatment cost $1000. How much does Archer pay?

A) $0.

B) $200.

C) $100.

D) $80.

B) $200.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

[Topic 8-11] (Exactly One Correct Answer) The following year, Archer is shot (by a coworker named Lana) during a particularly difficult mission. He is rushed into emergency surgery and makes a miraculous recovery. The total expenses in saving Archer’s life are $100,000. How much does Archer pay?

A) $19,900.

B) $20,400.

C) $20,000.

D) $20,500.

B) $20,400.

Sterling Archer is an employee of The Figgis Agency who self-insures their health insurance. His health insurance plan specifies 80/20 coinsurance with a $500 deductible. Treat all injuries as not work-related (i.e. covered by health insurance and not worker’s comp).

[Topic 8-12] (Exactly One Correct Answer) What provision in a health insurance policy would limit Archer’s payment for these services?

A) Traditional indemnity.

B) Accident forgiveness.

C) Experience rating.

D) Out-of-Pocket max.

D) Out-of-Pocket max.

[Topic 8-32] Which of the following scenarios correctly describes moral hazard or adverse selection in healthcare?

A) A patient visits a doctor more frequently than necessary, requesting unnecessary medical tests and procedures, knowing that their insurance will cover the costs.

B) A patient with a pre-existing condition chooses to purchase an insurance plan with a lower premium and higher deductible, knowing that their medical expenses will exceed the deductible.

C) A patient with a pre-existing condition chooses to purchase an insurance plan with a higher premium and lower deductible, knowing that their medical expenses will exceed the deductible.

D) An individual who is at low risk for developing a chronic disease chooses to purchase a comprehensive insurance plan with a higher premium, knowing that they will likely not need the extensive coverage.

E) None of the above.

A) A patient visits a doctor more frequently than necessary, requesting unnecessary medical tests and procedures, knowing that their insurance will cover the costs.

C) A patient with a pre-existing condition chooses to purchase an insurance plan with a higher premium and lower deductible, knowing that their medical expenses will exceed the deductible.

[Topic 8-83] Where does moral hazard show up in the financing of healthcare?

A) When insurers pay healthcare providers claims for services rendered to patients.

B) When patients pay premiums to insurers.

C) When healthcare providers provide services to patients.

D) When sponsors pay premiums to insurers or third-party payers.

E) None of the above.

E) None of the above.

. [Topic 8-31] (Exactly One Correct Answer) Which of the following statements accurately describes the difference between Medicare and Medicaid?

A) Medicare is a federal program that provides health insurance to elderly and nursing homes, while Medicaid is a joint federal and state program that provides health insurance to low-income individuals and for dialysis.

B) Medicare is a federal program that provides health insurance to low-income individuals and those on dialysis, while Medicaid is a federal program that provides health insurance to the elderly and for nursing homes.

C) Medicare is a federal program that provides health insurance to elderly and those on dialysis, while Medicaid is a joint federal and state program that provides health insurance to low-income individuals and for nursing homes.

D) Medicare is a joint federal and state program that provides health insurance to low-income individuals and for dialysis, while Medicaid is a federal program that provides health insurance to elderly individuals and nursing homes.

C) Medicare is a federal program that provides health insurance to elderly and those on dialysis, while Medicaid is a joint federal and state program that provides health insurance to low-income individuals and for nursing homes.

[Topic 8-17] The main feature or distinguishing characteristic of an HMO as compared to an indemnity plan is:

A) PCPs are at financial risk for overutilization of health care.

B) Premiums for HMOs are less than for indemnity.

C) There are networks of doctors.

D) Out-of-network providers are paid on a capitation basis in an HMO.

E) None of the above.

A) PCPs are at financial risk for overutilization of health care.

B) Premiums for HMOs are less than for indemnity.

C) There are networks of doctors.

[Topic 8-35] Which of the following statements accurately describes the difference between an FSA and HSA?

A) An HSA is only available to individuals with high-deductible health plans, while an FSA is available to anyone with a group health insurance plan.

B) Both an FSA and an HSA allow pre-tax contributions and withdrawals for eligible healthcare expenses, but an FSA requires the funds to be used by the end of the year or forfeited, while an HSA allows funds to roll over year to year.

C) An FSA is only available to individuals with high-deductible health plans, while an HSA is available to anyone with a group health insurance plan.

D) Both an FSA and an HSA allow pre-tax contributions and withdrawals for eligible healthcare expenses, but an HSA requires the funds to be used by the end of the year or forfeited, while an FSA allows funds to roll over year to year.

E) None of the above.

A) An HSA is only available to individuals with high-deductible health plans, while an FSA is available to anyone with a group health insurance plan.

B) Both an FSA and an HSA allow pre-tax contributions and withdrawals for eligible healthcare expenses, but an FSA requires the funds to be used by the end of the year or forfeited, while an HSA allows funds to roll over year to year.

[Topic 8-19] The main feature or distinguishing characteristic of an HMO as compared to a PPO plan is:

A) Premiums for HMOs are less than for PPO.

B) There are networks of doctors.

C) PCPs are at financial risk for overutilization of health care.

D) Out-of-network providers are paid on a capitation basis in an HMO.

E) None of the above.

A) Premiums for HMOs are less than for PPO.

C) PCPs are at financial risk for overutilization of health care.