Pubh 6012 TEST Questions and
Answers(A+ Solution guide) 2025
Exam Update
Uncertainty - ANSWER✔✔-people purchase health insurance to protect them from
medical costs associated with both expensive and unforeseen events: how to set the
consumers burden of cost at the right level that it encourages and makes available the
proper use of health care while discouraging imporoper usage
Risk - ANSWER✔✔-Providers: will beneficiary experience a covered medical event?
Consumer:buy insurance to protect themselves against an unforseen event
asymmetric information - ANSWER✔✔-causes insurance to have difficulty matching
health people with low deductible plans and health people with high deductible plans
Unhealthy consumers dont share all of the information regarding their condition with
provider so they dont get charged extra
adverse selection - ANSWER✔✔-unhealthy people overselect a particular plan; this
happens because people at risk all buy the same plan because it is more attractive. this
, leaves the insurer with a disproportionate number of high risk individuals. This leads to
increase in premiums
What are the two main methods of setting premiums - ANSWER✔✔-experience rating
and community rating
experience rating - ANSWER✔✔-how much a beneficiary or group of beneficiaries
spent on medical services previously to determine the amount of the premium for each
member or group
community rating - ANSWER✔✔-insurers use only geography and family composition
to set rates; in modified community rating, insurers may be allowed to consider other
characteristics such as age and sex
Large Group insurance - ANSWER✔✔-usually has cheaper rates than purchasing
health insurance individually or as part of a small group due to having an average risk
rate. Carriers also prefer to insure large groups because most of the admin costs
associated with insurance are the same whether the carrier is covering a few people or a
few thousand
Medical underwiting - ANSWER✔✔-there are ways for insurers to predict potential
future health expenses: underwiting is 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 (complicated legal question)
Answers(A+ Solution guide) 2025
Exam Update
Uncertainty - ANSWER✔✔-people purchase health insurance to protect them from
medical costs associated with both expensive and unforeseen events: how to set the
consumers burden of cost at the right level that it encourages and makes available the
proper use of health care while discouraging imporoper usage
Risk - ANSWER✔✔-Providers: will beneficiary experience a covered medical event?
Consumer:buy insurance to protect themselves against an unforseen event
asymmetric information - ANSWER✔✔-causes insurance to have difficulty matching
health people with low deductible plans and health people with high deductible plans
Unhealthy consumers dont share all of the information regarding their condition with
provider so they dont get charged extra
adverse selection - ANSWER✔✔-unhealthy people overselect a particular plan; this
happens because people at risk all buy the same plan because it is more attractive. this
, leaves the insurer with a disproportionate number of high risk individuals. This leads to
increase in premiums
What are the two main methods of setting premiums - ANSWER✔✔-experience rating
and community rating
experience rating - ANSWER✔✔-how much a beneficiary or group of beneficiaries
spent on medical services previously to determine the amount of the premium for each
member or group
community rating - ANSWER✔✔-insurers use only geography and family composition
to set rates; in modified community rating, insurers may be allowed to consider other
characteristics such as age and sex
Large Group insurance - ANSWER✔✔-usually has cheaper rates than purchasing
health insurance individually or as part of a small group due to having an average risk
rate. Carriers also prefer to insure large groups because most of the admin costs
associated with insurance are the same whether the carrier is covering a few people or a
few thousand
Medical underwiting - ANSWER✔✔-there are ways for insurers to predict potential
future health expenses: underwiting is 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 (complicated legal question)
