Certified Employee Benefit Specialist Group Benefits
Associate Exam 2 (CEBS GBA) Exam Questions and
Answers
What is the basic assumption underlying concept of a free market and how is it
challenged by the theory of "bounded rationality?" (Mod 1.1) -
ANSWER>>Assumption that rational customers will make informed decisions
about value, quality and price, while producers who meet consumer's demands
will be rewarded with market share and profit. However this is challenged by the
consumer's "bounded rationality" - rational consumer is only functional up to a
certain point because choices are constrained or bound by limited knowledge and
understanding of their choices.
What are economic benefits of a free market? (Mod 1.1) - ANSWER>>If an
individual does not like their provider or health plan, the should be able to "vote
with their feet" and select other options. This choice empowers customers,
regulates producers and drives efficiency.
Describe several ways the US Healthcare market does not function like a normal
market. (Mod 1.1) - ANSWER>>Healthcare market has significant asymmetry in
information between consumers, providers and insurers. Moral hazard is a
problem because the marginal cost of covered care is zero, causing some to
overconsume medical care. Many consumers choose doctors initially by
convenience, accessibility or recommendation. Cost has also been shown to be
lower on priority scale for choosing a provider.
List several recent initiatives in the US that purport (to claim, often falsely) to use
market forces to increase efficiency in the healthcare system. (Mod 1.1) -
ANSWER>>1) Employers are offering more HDHPs with some as high as $10,000.
These plans, often paired with HSAs, are coupled with the idea of transparency, or
making more info available to consumer on cost and quality. Idea is that
,consumers will have more skin in game and be prudent purchasers of care with
their own money.
2) ACA is creating marketplaces that employ a form of managed competition
where standardized health plans compete on cost and quality.
3) Public Medicaid and Medicare programs are moving towards requiring or
making choices available for managed care products that structure care within
provider networks.
Indicate the approximate percentages of the population covered by major health
programs. (Mod 1.2) - ANSWER>>Largest portion of Americans (48%) receive
health insurance through an Employer, 16% through Medicaid, 15% through
Medicare, 6% purchase insurance on their own
How did ACA change Medicare? (Mod 1.2) - ANSWER>>ACA expanded Medicare's
wellness and prevention benefits, improved prescription drug coverage and
financed experiments to control health care costs by testing alternative payment
methods and delivery systems.
How did ACA change eligibility for Medicaid benefits and how is this change
affecting the number of people who are enrolled? (Mod 1.2) - ANSWER>>ACA
shifted program eligibility from category based (ex: single parents with
dependents or people w/disabilities) to an income-based standard. Medicaid
once covered fewer than half of low-income Americans, but now ACA Medcaid
expansion has been steadily increasing enrollment, with largest increase in the
states who are participating.
Explain significance of US Supreme Court case National Federation of
Independent Business v Sebelius in 2012 (Mod 1.2) - ANSWER>>ACA sought to
expand Medicaid coverage to all individuals and families with incomes below
138% of the poverty level. US (first time) would have had a solid safety net of
insurance coverage for all lower income citizens. In the case, the court rules states
could choose not to expand (and Medicaid funding would not be withheld). By Jan
2015, 25 states chose not to expand.
,How has ACA affected number of uninsured Americans? (Mod 1.2) -
ANSWER>>Prior to ACA, 16.3% or 49.9 million Americans were uninsured. By
2014, this number reduced to 13% and by the first quarter of 2016 to 8.6%.
Describe private health insurance coverage with regard to a) size of firm
b) HDHPs with Medical Savings Accounts
c) variability of coverage by states (Mod 1.2) - ANSWER>>a) 98% of employers
with 200+ EE's offer health insurance but fewer than 45% of firms with 3-9 EE's do
so. Larger employers offer more choice of health plans than smaller employers;
small employers tend to offer POS plans that require higher EE cost sharing to go
outside network.
b) In 2006, HDHPs with medical savings accounts accounted for 4% of ER-
sponsored market, but by 2012, accounted for over 20%. In 2016, this rose to
almost 30%.
c) Range of ER-based options and quality of options available vary widely by state.
The percentage of the population covered by private insurance varies as well as
the options for different types of coverage.
What are the basic differences between the four medal categories of ACA health
plans? (Mod 1.3) - ANSWER>>Bronze, Silver, Gold and Platinum plans all have
same actuarial value. However, they differ in regard to amount of deductibles,
coinsurance, other out of pocket costs and premiums. Bronze plan has lowest
premium but most out of pocket costs. Platinum plan has lowest out of pocket
cost, but highest premium.
Why is the Silver Plan the most popular choice among ACA plans? (Mod 1.3) -
ANSWER>>Majority who enroll are eligible for federal tax credit subsidies tied to
a Silver level plan. People may still select a higher cost Gold or Platinum plan, but
will have to pay higher premiums. Cost-sharing subsidies to lower out of pocket
costs are only available to Silver plans.
, Do users of ACA marketplace exchanges have many choices and does evidence
indicate they choose the most cost-effective plans? (Mod 1.3) - ANSWER>>Ton of
choices and options (ex: in TX, 15 carriers offered an average of 31 plans per
county). A consumer comparing plans may see different premiums, coinsurance
and deductibles, but plans also may differ on every measure of out of pocket
costs including physician copays, ER payments, hospital stay payments. Studies
have found despite wide range of benefits, people are not choosing most cost-
effective plans....people on average choose plan 10% more expensive than what
would be optimal. Other studies suggest limiting variation in plan designs would
be choices more comprehensible (able to understand).
What is the provision in Part D Medicare law that gives a significant benefit to
pharmaceutical companies? (Mod 1.4) - ANSWER>>Part D Medicare Law prohibits
the government from using its purchasing power to negotiate widespread
discounts with drug plans.
Do Medicare Part D beneficiaries have many choices and does the evidence
suggest they choose the most cost-effective plans? (Mod 1.4) - ANSWER>>Provide
numerous choices (ex MA has 27 standalone, TX has 32). Most people do not
select the optimal plan or take advantage of open enrollment periods to obtain a
more cost-effective plan. Few people switch plans even when it would be in their
advantage to do so.
Define each part of Medicare (A,B,C,D) and the services provided under each
(Mod 1.4 - Reading) - ANSWER>>Part A = Hospital Services
Part B = Physician & Diagnostic Services
Part C = Medicare Advantage - Alternative Managed Care Option
Part D = Prescription Drugs
-Greatest choices in Part D and the Medicare Advantage Plan, which is where
most of analysis is focused on.
-C and D are paid out of pocket by recipients; A & B are funded by payroll
deductions (taxes)
Associate Exam 2 (CEBS GBA) Exam Questions and
Answers
What is the basic assumption underlying concept of a free market and how is it
challenged by the theory of "bounded rationality?" (Mod 1.1) -
ANSWER>>Assumption that rational customers will make informed decisions
about value, quality and price, while producers who meet consumer's demands
will be rewarded with market share and profit. However this is challenged by the
consumer's "bounded rationality" - rational consumer is only functional up to a
certain point because choices are constrained or bound by limited knowledge and
understanding of their choices.
What are economic benefits of a free market? (Mod 1.1) - ANSWER>>If an
individual does not like their provider or health plan, the should be able to "vote
with their feet" and select other options. This choice empowers customers,
regulates producers and drives efficiency.
Describe several ways the US Healthcare market does not function like a normal
market. (Mod 1.1) - ANSWER>>Healthcare market has significant asymmetry in
information between consumers, providers and insurers. Moral hazard is a
problem because the marginal cost of covered care is zero, causing some to
overconsume medical care. Many consumers choose doctors initially by
convenience, accessibility or recommendation. Cost has also been shown to be
lower on priority scale for choosing a provider.
List several recent initiatives in the US that purport (to claim, often falsely) to use
market forces to increase efficiency in the healthcare system. (Mod 1.1) -
ANSWER>>1) Employers are offering more HDHPs with some as high as $10,000.
These plans, often paired with HSAs, are coupled with the idea of transparency, or
making more info available to consumer on cost and quality. Idea is that
,consumers will have more skin in game and be prudent purchasers of care with
their own money.
2) ACA is creating marketplaces that employ a form of managed competition
where standardized health plans compete on cost and quality.
3) Public Medicaid and Medicare programs are moving towards requiring or
making choices available for managed care products that structure care within
provider networks.
Indicate the approximate percentages of the population covered by major health
programs. (Mod 1.2) - ANSWER>>Largest portion of Americans (48%) receive
health insurance through an Employer, 16% through Medicaid, 15% through
Medicare, 6% purchase insurance on their own
How did ACA change Medicare? (Mod 1.2) - ANSWER>>ACA expanded Medicare's
wellness and prevention benefits, improved prescription drug coverage and
financed experiments to control health care costs by testing alternative payment
methods and delivery systems.
How did ACA change eligibility for Medicaid benefits and how is this change
affecting the number of people who are enrolled? (Mod 1.2) - ANSWER>>ACA
shifted program eligibility from category based (ex: single parents with
dependents or people w/disabilities) to an income-based standard. Medicaid
once covered fewer than half of low-income Americans, but now ACA Medcaid
expansion has been steadily increasing enrollment, with largest increase in the
states who are participating.
Explain significance of US Supreme Court case National Federation of
Independent Business v Sebelius in 2012 (Mod 1.2) - ANSWER>>ACA sought to
expand Medicaid coverage to all individuals and families with incomes below
138% of the poverty level. US (first time) would have had a solid safety net of
insurance coverage for all lower income citizens. In the case, the court rules states
could choose not to expand (and Medicaid funding would not be withheld). By Jan
2015, 25 states chose not to expand.
,How has ACA affected number of uninsured Americans? (Mod 1.2) -
ANSWER>>Prior to ACA, 16.3% or 49.9 million Americans were uninsured. By
2014, this number reduced to 13% and by the first quarter of 2016 to 8.6%.
Describe private health insurance coverage with regard to a) size of firm
b) HDHPs with Medical Savings Accounts
c) variability of coverage by states (Mod 1.2) - ANSWER>>a) 98% of employers
with 200+ EE's offer health insurance but fewer than 45% of firms with 3-9 EE's do
so. Larger employers offer more choice of health plans than smaller employers;
small employers tend to offer POS plans that require higher EE cost sharing to go
outside network.
b) In 2006, HDHPs with medical savings accounts accounted for 4% of ER-
sponsored market, but by 2012, accounted for over 20%. In 2016, this rose to
almost 30%.
c) Range of ER-based options and quality of options available vary widely by state.
The percentage of the population covered by private insurance varies as well as
the options for different types of coverage.
What are the basic differences between the four medal categories of ACA health
plans? (Mod 1.3) - ANSWER>>Bronze, Silver, Gold and Platinum plans all have
same actuarial value. However, they differ in regard to amount of deductibles,
coinsurance, other out of pocket costs and premiums. Bronze plan has lowest
premium but most out of pocket costs. Platinum plan has lowest out of pocket
cost, but highest premium.
Why is the Silver Plan the most popular choice among ACA plans? (Mod 1.3) -
ANSWER>>Majority who enroll are eligible for federal tax credit subsidies tied to
a Silver level plan. People may still select a higher cost Gold or Platinum plan, but
will have to pay higher premiums. Cost-sharing subsidies to lower out of pocket
costs are only available to Silver plans.
, Do users of ACA marketplace exchanges have many choices and does evidence
indicate they choose the most cost-effective plans? (Mod 1.3) - ANSWER>>Ton of
choices and options (ex: in TX, 15 carriers offered an average of 31 plans per
county). A consumer comparing plans may see different premiums, coinsurance
and deductibles, but plans also may differ on every measure of out of pocket
costs including physician copays, ER payments, hospital stay payments. Studies
have found despite wide range of benefits, people are not choosing most cost-
effective plans....people on average choose plan 10% more expensive than what
would be optimal. Other studies suggest limiting variation in plan designs would
be choices more comprehensible (able to understand).
What is the provision in Part D Medicare law that gives a significant benefit to
pharmaceutical companies? (Mod 1.4) - ANSWER>>Part D Medicare Law prohibits
the government from using its purchasing power to negotiate widespread
discounts with drug plans.
Do Medicare Part D beneficiaries have many choices and does the evidence
suggest they choose the most cost-effective plans? (Mod 1.4) - ANSWER>>Provide
numerous choices (ex MA has 27 standalone, TX has 32). Most people do not
select the optimal plan or take advantage of open enrollment periods to obtain a
more cost-effective plan. Few people switch plans even when it would be in their
advantage to do so.
Define each part of Medicare (A,B,C,D) and the services provided under each
(Mod 1.4 - Reading) - ANSWER>>Part A = Hospital Services
Part B = Physician & Diagnostic Services
Part C = Medicare Advantage - Alternative Managed Care Option
Part D = Prescription Drugs
-Greatest choices in Part D and the Medicare Advantage Plan, which is where
most of analysis is focused on.
-C and D are paid out of pocket by recipients; A & B are funded by payroll
deductions (taxes)
