AHM-520 AHIP Exam Questions and Free Practice Test

Question 19

- (Topic 1)
The Violin Company offers its employees a triple option of health plans: an HMO, an HMO with a point of service (POS) option, and an indemnity plan.
Premiums are lowest for the HMO option and highest for the indemnity plan. Violin employees who anticipate that they will be individual low utilizes of healthcare services are most likely to enroll in the

A. HMO and are least likely to enroll in the HMO with the POS option

B. HMO and are least likely to enroll in the indemnity plan

C. Indemnity plan and are least likely to enroll in the HMO

D. Indemnity plan and are least likely to enroll in the HMO with the POS option

Correct Answer:B

Question 20

- (Topic 2)
A cost for which a benefit is forfeited in choosing one decision alternative over another alternative is known as

A. A marginal unit cost

B. An opportunity cost

C. An incremental cost

D. A differential cost

Correct Answer:B

Question 21

- (Topic 1)
Because a health plan cannot decline coverage for individuals who are eligible for conversion of group health coverage to individual health coverage, the bulk of the health plan's underwriting for conversion policies is accomplished through health plan design.

A. True

B. False

Correct Answer:A

Question 22

- (Topic 1)
Three general strategies that health plans use for controlling types of risk are risk avoidance, risk transfer, and risk acceptance. The following statements are about these strategies. Three of these statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

A. Generally, the smaller the likely benefits of accepting a risk, and the lower the costs of avoiding that risk, the greater the likelihood that a health plan will elect to avoid the risk.

B. A health plan is seldom able to transfer any of the risk that utilization rates will be higher than expected and that its cost of providing healthcare will exceed the revenues it receives.

C. If a risk is a pure risk from the point of view of a health plan, then the health plan most likely will attempt to avoid the risk.

D. A health plan would most likely transfer some or all of its utilization risk if it pays a provider a rate that is based on the number of plan enrollees that choose the provider as their primary care provider (PCP).

Correct Answer:B

Question 23

- (Topic 1)
Provider reimbursement methods that transfer some utilization risk from a health plan to providers affect the health plan's RBC formula. A health plan's use of these reimbursement methods is likely to result in

A. An increase the health plan's underwriting risk

B. A decrease the health plan's credit risk

C. A decrease the health plan's net worth requirement

D. All of the above

Correct Answer:C

Question 24

- (Topic 1)
Experience rating methods can be either prospective or retrospective. With regard to these types of experience rating methods, it can correctly be stated that

A. 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

B. 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

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

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

Correct Answer:C

START AHM-520 EXAM