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AHIP AHM-520: Health Plan Finance and Risk Management

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Question 1

- (Topic 1)
The Lighthouse health plan operates in a state that allows the health plan to use an underwriting method of determining a group's premium in which underwriters treat several small groups as one large group for risk assessment purposes. This method, which helps Lighthouse more accurately estimate a small group's probable claims costs, is known as

A. Case stripping

B. The low-option rating method

C. The rate spread method

D. Pooling

Correct Answer:D

Question 2

- (Topic 1)
The Sanford Group, a provider group, entered into a risk contract with a health plan. Sanford has purchased aggregate stop-loss coverage with an attachment point of 115% of the group's predicted healthcare costs of $2,000,000 for the year. Sanford has a copayment of 10% for any costs above the attachment point. If Sanford's actual costs for the year are $2,800,000, then, according to the terms of the aggregate stop-loss agreement, the amount that Sanford is responsible for is

A. $2,080,000

B. $2,300,000

C. $2,350,000

D. $2,380,000

Correct Answer:C

Question 3

- (Topic 1)
A key factor that distinguishes the various types of health plans is the type and amount of risk that a health plan assumes with respect to the delivery and financing of healthcare benefits. An example of a type of health plan that typically assumes the financial risk of delivering and financing healthcare benefits is a

A. Third party administrator (TPA)

B. Utilization review organization (URO)

C. Preferred provider organization (PPO)

D. Pharmacy benefit management (PBM) plan

Correct Answer:C

Question 4

- (Topic 2)
Costs that can be defined by behavior are most commonly classified as fixed costs, variable costs and semi-variable costs. Examples of fixed costs include:

A. Rent, insurance expense, and depreciation on computer equipment

B. Rent, claims processing costs, and selling expenses

C. Claims processing costs, telephone expense, and depreciation on computer equipment

D. Premium processing, rent, and selling expenses

Correct Answer:A

Question 5

- (Topic 2)
A health plan can use a SWOT (strengths, weaknesses, opportunities, and threats) analysis to analyze its relationships with the major providers in each market in which it conducts business.

A. True

B. False

Correct Answer:A

Question 6

- (Topic 1)
The following statements are about federal laws and regulations which affect health plans that offer products and services to the employer group market. Select the answer choice containing the correct statement.

A. Amendments to the HMO Act of 1973 require federally qualified HMOs to adjust a group's prior premiums on the basis of the group's experience during the prior rating period.

B. The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986 requires that, if a plan sponsor elects to terminate its group coverage with a health plan, then the health plan must continue its coverage for the COBRA-qualified beneficiaries in the group.

C. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 generally requires the guaranteed renewal of healthcare coverage for certain individuals and for both small and large groups, regardless of the health status of any member.

D. The Mental Health Parity Act (MHPA) of 1996 mandates that all health plans must offer benefits for mental healthcare.

Correct Answer:C

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