MEDSTUDY.COM
CEBS GBA 1& 2 COMBINED EXAM PRACTICE
QUESTIONS WITH VERIFIED SOLUTIONS
BEST QUALITY EXAM GRADED A+ NEW
MODIFIED 2026 LATEST UPDATE
What are the two broad categories of health insurers? --CORRECT ANSWER--1) Private
insurers
2) Public programs / insurers
What are the 3 major private insurers? --CORRECT ANSWER--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
d) Red Shield
e) Humana --CORRECT ANSWER--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 --CORRECT ANSWER--c) Blue Shield
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,MEDSTUDY.COM
What type of health insurance is issued by life insurance companies, casualty insurance
companies, and companies formed exclusively to offer health care insurance? --CORRECT
ANSWER--commercial health insurance
True or False: Commercial insurance companies are taxable (for-profit) entities. --CORRECT
ANSWER--True
True or False: Following World War II, the Internal Revenue Service ruled that employer-
provided health insurance was taxable. --CORRECT ANSWER--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. --CORRECT ANSWER--True
V.A. benefits, the TRICARE program, HHS, Medicare, and Medicaid are all examples of:
a) Public programs / insurers
b) Private insurers --CORRECT ANSWER--a) Public programs / insurers
Which program was established by Congress in 1965 primarily to provide medical benefits to
individuals age 65 or older? --CORRECT ANSWER--Medicare
Which Part of Medicare coverage provides hospital and some skilled nursing facility
coverage?
a) Part A
b) Part B
c) Part C
d) Part D --CORRECT ANSWER--Part A
Which Part of Medicare coverage covers physician services, amulatory surgical services,
outpatient and other miscellaneous services?
a) Part A
b) Part B
c) Part C
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d) Part D --CORRECT ANSWER--Part B
Which Part of Medicare coverage is considered managed care coverage offered by private
insurance companies? --CORRECT ANSWER--Part C
Which Part of Medicare coverarage offers prescription drug coverage? --CORRECT
ANSWER--Part D
Which Part of Medicare coverage is free for anyone eligible for Social Security benefits?
a) Part A
b) Part B
c) Part C
d) Part D --CORRECT ANSWER--Part A
Which Part of Medicare coverage requires a monthly premium from enrollees that varies with
income level?
a) Part A
b) Part B
c) Part C
d) Part D --CORRECT ANSWER--Part B
What is another name for Medicare Part C, which can be selected in lieu of Parts A and B? --
CORRECT ANSWER--Medicare Advantage Plans
True or False: Medicare Part D plans offer similar coverage at a similar cost. --CORRECT
ANSWER--False: Each Part D plan offers somewhat different coverage, so the cost of each
plan can vary widely.
Which program was established by the states and federal government in 1966 with the goal of
providing a medical safety net for low-income and disabled individuals? --CORRECT
ANSWER--Medicaid
True or False: Congress mandates that Medicaid cover hospital and physician care, but states
can choose to expand the basic package to include nursing home benefits. --CORRECT
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ANSWER--False: A mandatory nursing home benefit was added to Medicaid by Congress in
1972.
Combining the provision of health care services and the insurance function into a single
entity, what kind of plans aim to both increase quality of care and decrease the cost of health
care services? --CORRECT ANSWER--managed care plans
What kind of plans are created by insurers that either directly own a provider network or
create one through contracts with independent providers? --CORRECT ANSWER--
traditional plans
Which type of plan is based on the premise that there should be more incentive placed on
preventing illnesses than on treating them? --CORRECT ANSWER--Health Maintenance
Organization (HMO) plan
What is considered the primary drawback of the HMO delivery model? --CORRECT
ANSWER--HMOs include a limited network of providers with a primary care physician who
authorizes all services.
What are the 4 distinct characteristics of insurance? --CORRECT ANSWER--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? --CORRECT ANSWER--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. -
-CORRECT ANSWER--random
What is the sole exception to the element of risk transfer, assuming the risk itself rather than
an insurance company? --CORRECT ANSWER--self-insurance
Page 4 of 207
CEBS GBA 1& 2 COMBINED EXAM PRACTICE
QUESTIONS WITH VERIFIED SOLUTIONS
BEST QUALITY EXAM GRADED A+ NEW
MODIFIED 2026 LATEST UPDATE
What are the two broad categories of health insurers? --CORRECT ANSWER--1) Private
insurers
2) Public programs / insurers
What are the 3 major private insurers? --CORRECT ANSWER--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
d) Red Shield
e) Humana --CORRECT ANSWER--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 --CORRECT ANSWER--c) Blue Shield
Page 1 of 207
,MEDSTUDY.COM
What type of health insurance is issued by life insurance companies, casualty insurance
companies, and companies formed exclusively to offer health care insurance? --CORRECT
ANSWER--commercial health insurance
True or False: Commercial insurance companies are taxable (for-profit) entities. --CORRECT
ANSWER--True
True or False: Following World War II, the Internal Revenue Service ruled that employer-
provided health insurance was taxable. --CORRECT ANSWER--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. --CORRECT ANSWER--True
V.A. benefits, the TRICARE program, HHS, Medicare, and Medicaid are all examples of:
a) Public programs / insurers
b) Private insurers --CORRECT ANSWER--a) Public programs / insurers
Which program was established by Congress in 1965 primarily to provide medical benefits to
individuals age 65 or older? --CORRECT ANSWER--Medicare
Which Part of Medicare coverage provides hospital and some skilled nursing facility
coverage?
a) Part A
b) Part B
c) Part C
d) Part D --CORRECT ANSWER--Part A
Which Part of Medicare coverage covers physician services, amulatory surgical services,
outpatient and other miscellaneous services?
a) Part A
b) Part B
c) Part C
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d) Part D --CORRECT ANSWER--Part B
Which Part of Medicare coverage is considered managed care coverage offered by private
insurance companies? --CORRECT ANSWER--Part C
Which Part of Medicare coverarage offers prescription drug coverage? --CORRECT
ANSWER--Part D
Which Part of Medicare coverage is free for anyone eligible for Social Security benefits?
a) Part A
b) Part B
c) Part C
d) Part D --CORRECT ANSWER--Part A
Which Part of Medicare coverage requires a monthly premium from enrollees that varies with
income level?
a) Part A
b) Part B
c) Part C
d) Part D --CORRECT ANSWER--Part B
What is another name for Medicare Part C, which can be selected in lieu of Parts A and B? --
CORRECT ANSWER--Medicare Advantage Plans
True or False: Medicare Part D plans offer similar coverage at a similar cost. --CORRECT
ANSWER--False: Each Part D plan offers somewhat different coverage, so the cost of each
plan can vary widely.
Which program was established by the states and federal government in 1966 with the goal of
providing a medical safety net for low-income and disabled individuals? --CORRECT
ANSWER--Medicaid
True or False: Congress mandates that Medicaid cover hospital and physician care, but states
can choose to expand the basic package to include nursing home benefits. --CORRECT
Page 3 of 207
, MEDSTUDY.COM
ANSWER--False: A mandatory nursing home benefit was added to Medicaid by Congress in
1972.
Combining the provision of health care services and the insurance function into a single
entity, what kind of plans aim to both increase quality of care and decrease the cost of health
care services? --CORRECT ANSWER--managed care plans
What kind of plans are created by insurers that either directly own a provider network or
create one through contracts with independent providers? --CORRECT ANSWER--
traditional plans
Which type of plan is based on the premise that there should be more incentive placed on
preventing illnesses than on treating them? --CORRECT ANSWER--Health Maintenance
Organization (HMO) plan
What is considered the primary drawback of the HMO delivery model? --CORRECT
ANSWER--HMOs include a limited network of providers with a primary care physician who
authorizes all services.
What are the 4 distinct characteristics of insurance? --CORRECT ANSWER--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? --CORRECT ANSWER--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. -
-CORRECT ANSWER--random
What is the sole exception to the element of risk transfer, assuming the risk itself rather than
an insurance company? --CORRECT ANSWER--self-insurance
Page 4 of 207
