CEBS GBA 2 Exam 2025 Questions and
Answers
Which of the following are distinguishing characterstics that make health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other
clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or
government agencies, insulating patients from health care costs.
f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e - ANS Which of the following are distinguishing characterstics that
make health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other
clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or
government agencies, insulating patients from health care costs.
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,f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e
What are the 4 distinct characteristics of insurance? - ANS 1) Pooling of losses
2) Payment only for random losses
3) Risk transfer
4) Indemnification
According to the law of numbers, pooling implies what 2 things? - ANS 1) The sharing of
losses by the entire group
2) The prediction of future losses with some accuracy.
A __________ loss is one that is unforseen and unexpected and occurs as a result of chance. -
ANS random
What is the sole exception to the element of risk transfer, assuming the risk itself rather than
an insurance company? - ANS self-insurance
_____________________ restores the individual to their preexisting state had the loss not
occurred. - ANS indemnification
________________ occurs because individuals and businesses are more likely to have claims,
and more inclined to purchase insurance, than those who are less likely to have claims. -
ANS Adverse selection
True or False: Adverse selection, if unchecked, will lead toward more healthy individuals
seeking insurance and lowering premiums. - ANS False: Adverse selection, if unchecked, will
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,lead toward more sick individuals seeking insurance, driving up insurance premiums, and then
even fewer healthy individuals will purchase, continuing the spiral of higher costs.
True or False: Adverse selection occurs when individual buyers of health insurance know more
about their health status than do insurers. - ANS True
_______________ is the problem faced by insurers because individuals are more likely to use
unneeded health services when they are not paying the full cost of those services. -
ANS Moral hazard
What is the primary tool that insurers have to combat the moral hazard problem? -
ANS Coinsurancce (%) and copayments ($)
What is the generic term for any outside party, typically an insurance company or a a
government program, which pays for part or all of a patient's health care services? -
ANS third-party payer
What are the two broad categories of health insurers? - ANS 1) Private insurers
2) Public programs / insurers
What are the 3 major private insurers? - ANS 1) Blue Cross Blue Shield
2) Commercial insurers
3) Self-insurers
_________________ Plans originated as a number of separate insurance programs offered by
individual hospitals.
a) Blue Cross
b) Red Cross
c) Blue Shield
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, d) Red Shield
e) Humana - ANS a) Blue Cross
_________________ Plans originated as a number of separate insurance programs offered by
individual physicians.
a) Blue Cross
b) Red Cross
c) Blue Shield
d) Red Shield
e) Humana - ANS c) Blue Shield
What type of health insurance is issued by life insurance companies, casualty insurance
companies, and companies formed exclusively to offer health care insurance? -
ANS commercial health insurance
True or False: Commercial insurance companies are taxable (for-profit) entities. - ANS True
True or False: Following World War II, the Internal Revenue Service ruled that employer-
provided health insurance was taxable. - ANS False: The IRS ruled that employer-provided
health insurance was NOT taxable, giving employers incentive to offer the tax-free benefit.
True or False: The US federal government is a major insurer as well as a direct provider of
health care services. - ANS True
V.A. benefits, the TRICARE program, HHS, Medicare, and Medicaid are all examples of:
a) Public programs / insurers
b) Private insurers - ANS a) Public programs / insurers
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Answers
Which of the following are distinguishing characterstics that make health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other
clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or
government agencies, insulating patients from health care costs.
f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e - ANS Which of the following are distinguishing characterstics that
make health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other
clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or
government agencies, insulating patients from health care costs.
Pg. 1 Copyright © 2025 Jasonmcconell. ALL RIGHTS RESERVED.
,f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e
What are the 4 distinct characteristics of insurance? - ANS 1) Pooling of losses
2) Payment only for random losses
3) Risk transfer
4) Indemnification
According to the law of numbers, pooling implies what 2 things? - ANS 1) The sharing of
losses by the entire group
2) The prediction of future losses with some accuracy.
A __________ loss is one that is unforseen and unexpected and occurs as a result of chance. -
ANS random
What is the sole exception to the element of risk transfer, assuming the risk itself rather than
an insurance company? - ANS self-insurance
_____________________ restores the individual to their preexisting state had the loss not
occurred. - ANS indemnification
________________ occurs because individuals and businesses are more likely to have claims,
and more inclined to purchase insurance, than those who are less likely to have claims. -
ANS Adverse selection
True or False: Adverse selection, if unchecked, will lead toward more healthy individuals
seeking insurance and lowering premiums. - ANS False: Adverse selection, if unchecked, will
Pg. 2 Copyright © 2025 Jasonmcconell. ALL RIGHTS RESERVED.
,lead toward more sick individuals seeking insurance, driving up insurance premiums, and then
even fewer healthy individuals will purchase, continuing the spiral of higher costs.
True or False: Adverse selection occurs when individual buyers of health insurance know more
about their health status than do insurers. - ANS True
_______________ is the problem faced by insurers because individuals are more likely to use
unneeded health services when they are not paying the full cost of those services. -
ANS Moral hazard
What is the primary tool that insurers have to combat the moral hazard problem? -
ANS Coinsurancce (%) and copayments ($)
What is the generic term for any outside party, typically an insurance company or a a
government program, which pays for part or all of a patient's health care services? -
ANS third-party payer
What are the two broad categories of health insurers? - ANS 1) Private insurers
2) Public programs / insurers
What are the 3 major private insurers? - ANS 1) Blue Cross Blue Shield
2) Commercial insurers
3) Self-insurers
_________________ Plans originated as a number of separate insurance programs offered by
individual hospitals.
a) Blue Cross
b) Red Cross
c) Blue Shield
Pg. 3 Copyright © 2025 Jasonmcconell. ALL RIGHTS RESERVED.
, d) Red Shield
e) Humana - ANS a) Blue Cross
_________________ Plans originated as a number of separate insurance programs offered by
individual physicians.
a) Blue Cross
b) Red Cross
c) Blue Shield
d) Red Shield
e) Humana - ANS c) Blue Shield
What type of health insurance is issued by life insurance companies, casualty insurance
companies, and companies formed exclusively to offer health care insurance? -
ANS commercial health insurance
True or False: Commercial insurance companies are taxable (for-profit) entities. - ANS True
True or False: Following World War II, the Internal Revenue Service ruled that employer-
provided health insurance was taxable. - ANS False: The IRS ruled that employer-provided
health insurance was NOT taxable, giving employers incentive to offer the tax-free benefit.
True or False: The US federal government is a major insurer as well as a direct provider of
health care services. - ANS True
V.A. benefits, the TRICARE program, HHS, Medicare, and Medicaid are all examples of:
a) Public programs / insurers
b) Private insurers - ANS a) Public programs / insurers
Pg. 4 Copyright © 2025 Jasonmcconell. ALL RIGHTS RESERVED.
