1
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IHOP Exam 2 Questions and Answers
(100% Correct Answers) Already Graded
A+
How We Pay for Health Care— Ans: Insurance or Self Pay
Complexity of US Health Care System— Ans: Many payers, many
private plans, many government programs, many payment
methods, many uninsured
© 2025 Assignment Expert
Financing Influence on Demand— Ans: This determines who has
access to care
Health Insurance— Ans: lowers out-of-pocket costs, patient's
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consumer more, leads to a "moral hazard"
Financing Influence on Supply— Ans: New services proliferate
when they are covered by health insurance, given rise to
subindustries, influence on technology diffusion and utilization, get
more of what is paid for and provide more of what they are paid
for
Consequences of Financing— Ans: Various Management
Decisions Influenced By Reimbursement, Financing affects supply
& distribution of health professionals, financing eventually affects
total health care expenditures
Expenditures are Increase By— Ans: Expansion of health
insurance, increase in health insurance premiums
Expenditures Can Be Reduced By— Ans: Restricting Insurance,
Restricting Reimbursement to Providers, Having Few Specialists,
Spending Less on R & D, Direct control over utilization, Designating
certain services as not covered
Insurance— Ans: Protects against risk
, 2
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Risk— Ans: The possibility of substantial financial loss from some
event, where probability of occurrence is small
Four Principles of Insurance— Ans: 1. Risk is Unpredictable for the
Individual 2. Risk can be predicted with some accuracy in a large
group 3. Insurance pools resources to spread risk 4. Losses are
shared by all members
Underwriting— Ans: Process of using a large group to estimate
total risk for an individual and spread the risk
Health Insurance— Ans: Is designed to be used, unlike
homeowner's insurance, flood insurance, car insurance, life
insurance etc.
© 2025 Assignment Expert
Premiums— Ans: amount charged by insurer to insure against risk,
involves employer & employee cost sharing
Cost sharing— Ans: deductibles, co-payments, coinsurance
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reduces moral hazard
Moral hazard— Ans: using lots of resources because you have
them
Rand Cost Sharing Experiment of 1980s— Ans: Identified the
concept that cost sharing reduces moral hazard
Deductibles— Ans: amount paid before insurance covers costs,
applied annually
First dollar coverage plans— Ans: plans without co-pays or
deductibles, very rare
Co-payments— Ans: amount paid along with insurance payment
for services
Coinsurance— Ans: another insurance plan besides primary plan
to cover other uncovered costs
Two Risk Assessment Methods— Ans: experience rating,
community rating
Experience rating— Ans: group's medical claims experience, vary
from group to group
, 3
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Community Rating— Ans: risk spread among a larger community,
risks include smoking, pre-existing conditions etc. good risks help
pay for poor risks
Indemnity plan— Ans: reimburses the insured a predetermined
amount per service, insured is responsible for paying provider
Service Plan— Ans: provides services to the insured, plan pays the
provider directly-except for deductibles and co-payments
Health Insurance Coverage— Ans: only what is considered
"medically necessary", vision and dental are often separate
Group Insurance— Ans: Tax advantages when obtained through
employer
© 2025 Assignment Expert
Individual insurance— Ans: cost based on individual's health, this
is most expensive way of obtaining insurance
Managed Care Plans— Ans: Group plans where every member
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has primary care doctor, you need primary care doctor to refer to
specialists, were designed to try to control costs
Self Insurance— Ans: group insurance offered by large firms, ie.
The University of Iowa, spurred by public policy, No premium tax
on employers
ERISA— Ans: Passed in 1974 exempts self insured from state
insurance regulations
Self Insured Private Firms— Ans: 55% of insured employees are at
these firms, if a firm has 5000+ employees 89% of them are self
insured
Health Reimbursement Arrangement— Ans: Funded by the
employer, employees prohibited from contributing, HDHP is
optional
Health Savings Account (HSA)— Ans: Employer contribution is
optional, HDHP is required, contributions tax-deductible, qualified
withdrawals are tax-free, account earnings are tax-exempt
Third-party payers— Ans: insurance companies, managed care
organizations, BlueCross BlueShield, government
For Expert help and assignment solutions, +254707240657
IHOP Exam 2 Questions and Answers
(100% Correct Answers) Already Graded
A+
How We Pay for Health Care— Ans: Insurance or Self Pay
Complexity of US Health Care System— Ans: Many payers, many
private plans, many government programs, many payment
methods, many uninsured
© 2025 Assignment Expert
Financing Influence on Demand— Ans: This determines who has
access to care
Health Insurance— Ans: lowers out-of-pocket costs, patient's
Guru01 - Stuvia
consumer more, leads to a "moral hazard"
Financing Influence on Supply— Ans: New services proliferate
when they are covered by health insurance, given rise to
subindustries, influence on technology diffusion and utilization, get
more of what is paid for and provide more of what they are paid
for
Consequences of Financing— Ans: Various Management
Decisions Influenced By Reimbursement, Financing affects supply
& distribution of health professionals, financing eventually affects
total health care expenditures
Expenditures are Increase By— Ans: Expansion of health
insurance, increase in health insurance premiums
Expenditures Can Be Reduced By— Ans: Restricting Insurance,
Restricting Reimbursement to Providers, Having Few Specialists,
Spending Less on R & D, Direct control over utilization, Designating
certain services as not covered
Insurance— Ans: Protects against risk
, 2
For Expert help and assignment solutions, +254707240657
Risk— Ans: The possibility of substantial financial loss from some
event, where probability of occurrence is small
Four Principles of Insurance— Ans: 1. Risk is Unpredictable for the
Individual 2. Risk can be predicted with some accuracy in a large
group 3. Insurance pools resources to spread risk 4. Losses are
shared by all members
Underwriting— Ans: Process of using a large group to estimate
total risk for an individual and spread the risk
Health Insurance— Ans: Is designed to be used, unlike
homeowner's insurance, flood insurance, car insurance, life
insurance etc.
© 2025 Assignment Expert
Premiums— Ans: amount charged by insurer to insure against risk,
involves employer & employee cost sharing
Cost sharing— Ans: deductibles, co-payments, coinsurance
Guru01 - Stuvia
reduces moral hazard
Moral hazard— Ans: using lots of resources because you have
them
Rand Cost Sharing Experiment of 1980s— Ans: Identified the
concept that cost sharing reduces moral hazard
Deductibles— Ans: amount paid before insurance covers costs,
applied annually
First dollar coverage plans— Ans: plans without co-pays or
deductibles, very rare
Co-payments— Ans: amount paid along with insurance payment
for services
Coinsurance— Ans: another insurance plan besides primary plan
to cover other uncovered costs
Two Risk Assessment Methods— Ans: experience rating,
community rating
Experience rating— Ans: group's medical claims experience, vary
from group to group
, 3
For Expert help and assignment solutions, +254707240657
Community Rating— Ans: risk spread among a larger community,
risks include smoking, pre-existing conditions etc. good risks help
pay for poor risks
Indemnity plan— Ans: reimburses the insured a predetermined
amount per service, insured is responsible for paying provider
Service Plan— Ans: provides services to the insured, plan pays the
provider directly-except for deductibles and co-payments
Health Insurance Coverage— Ans: only what is considered
"medically necessary", vision and dental are often separate
Group Insurance— Ans: Tax advantages when obtained through
employer
© 2025 Assignment Expert
Individual insurance— Ans: cost based on individual's health, this
is most expensive way of obtaining insurance
Managed Care Plans— Ans: Group plans where every member
Guru01 - Stuvia
has primary care doctor, you need primary care doctor to refer to
specialists, were designed to try to control costs
Self Insurance— Ans: group insurance offered by large firms, ie.
The University of Iowa, spurred by public policy, No premium tax
on employers
ERISA— Ans: Passed in 1974 exempts self insured from state
insurance regulations
Self Insured Private Firms— Ans: 55% of insured employees are at
these firms, if a firm has 5000+ employees 89% of them are self
insured
Health Reimbursement Arrangement— Ans: Funded by the
employer, employees prohibited from contributing, HDHP is
optional
Health Savings Account (HSA)— Ans: Employer contribution is
optional, HDHP is required, contributions tax-deductible, qualified
withdrawals are tax-free, account earnings are tax-exempt
Third-party payers— Ans: insurance companies, managed care
organizations, BlueCross BlueShield, government
