Deck 8: Understanding Health Insurance

Question 1

Blue Cross established its first hospital insurance plan at __________ in 1929 by agreeing to provide 1,500 teachers with 21 days of hospital care per year at a price of $6 per person.

A) University of Alabama
B) Baylor University
C) Texas A&M University
D) Louisiana State University

Answer 1

B

Question 2

One instance where adverse selection is a key concern is with the increasing popularity of a(n):

A) high-deductible health plan.
B) low-deductible health plan.
C) indemnity plan.
D) managed care plan.

Answer 2

A

Question 3

Which method of setting premiums allows insurers to consider factors such as age and gender?

A) Experience rating
B) Genetic rating
C) Pure community rating
D) Modified community rating

Answer 3

D

Question 4

Which of the following has the most restrictive rules pertaining to patients and providers?

A) Health maintenance organization
B) Preferred provider organization
C) Point-of-service plan
D) Fee-for-service plan

Question 5

Uncertainty about risk and the presence of asymmetric information lead to the problem of adverse selection.

Question 6

Individual contributions to health savings accounts are made with pre-income tax dollars; however, withdrawals to pay for qualified healthcare expense are taxable.

Question 7

The point-of-service model attempts to locate a middle ground between the very restrictive HMO models and the fee-for-service structure that resulted in very high healthcare utilization and costs.

Question 8

Even if insurance companies make their decisions in the context of asymmetric information, they cannot determine with certainty the __________ to charge each individual.

Question 9

Whether companies are allowed to consider an applicant's medical history or other personal information to help assess risk of healthcare needs in the future is a practice referred to as medical __________.

Question 10

__________ uses managed care organization personnel to manage and coordinate patient care to make sure care is provided in the most cost-effective manner.

Question 11

Which of the following is a set dollar amount a beneficiary pays when receiving a service from a provider?

A) Deductible
B) Premium
C) Co-payment
D) Co-insurance

Question 12

Which of the following is the term used by economists to describe when one party to a transaction has more information than the other party?

A) Information inequality
B) Asymmetric information
C) Information imbalance
D) Skewed information

Question 13

Which of the following is a service utilization approach that includes using trained personnel to manage and coordinate the care of patients?

A) Utilization review
B) Risk management
C) Case management
D) Care coordination

Question 14

The community rating does not take into account claims history of health status when setting premiums.

Question 15

Managed care organizations and managed care plans create incentives to provide fewer services.

Question 16

Point-of-service plans combine features from both HMOs and PPOs.

Question 17

Utilization review allows a managed care organization to evaluate whether provided services are appropriate and then deny payment for services that were unnecessary.

Question 18

A gatekeeper prevents primary care providers from making sure that necessary and appropriate care is provided.

Question 19

In the landscape of health insurance, adverse selection is when unhealthy people over-select a particular plan.