D523 Healthcare Policy and Economics Practice
Exam Study Guide 2026 | Nursing Healthcare
Systems and Policy Exam Questions and Answers
PDF
• This 200-question practice exam covers all core domains of D523 Healthcare
Policy and Economics, designed to mirror the depth and rigor of the actual WGU
nursing licensure assessment.
• Use this material by attempting each question independently before checking the
highlighted correct answer and EXPERT RATIONALE — this active recall method
maximizes retention and exam readiness.
D523 Healthcare Policy and Economics — Practice Exam 200 Multiple Choice
Questions
1. Which of the following best describes the primary goal of healthcare policy?
A. To maximize hospital profits
B. To regulate pharmaceutical pricing exclusively
C. To allocate healthcare resources and improve population health outcomes
D. To eliminate the role of private insurance
E. To standardize physician salaries nationally
C. To allocate healthcare resources and improve population health
outcomes
EXPERT RATIONALE: Healthcare policy is fundamentally concerned with how resources
are distributed across a population to improve overall health outcomes, access, and
equity — not limited to any single sector.
2. The Affordable Care Act (ACA) was primarily designed to:
A. Eliminate Medicare and Medicaid
,B. Privatize all public hospitals
C. Expand health insurance coverage and reduce the number of uninsured
Americans
D. Replace employer-sponsored insurance
E. Limit coverage to individuals under age 65
C. Expand health insurance coverage and reduce the number of uninsured
Americans
EXPERT RATIONALE: The ACA's core goals included expanding Medicaid, creating
insurance marketplaces, and implementing consumer protections to reduce the
uninsured rate.
3. Which economic concept refers to the idea that individuals tend to overuse
healthcare services when they do not bear the full cost?
A. Adverse selection
B. Price elasticity
C. Opportunity cost
D. Moral hazard
E. Marginal utility
D. Moral hazard
EXPERT RATIONALE: Moral hazard occurs when insured individuals consume more
healthcare than they would if they paid full costs, because insurance reduces the
financial consequences of their decisions.
4. Medicaid is primarily funded by:
A. Individual taxpayer premiums
B. Hospital endowments
,C. Federal and state governments jointly
D. The Federal Reserve
E. Private insurance companies
C. Federal and state governments jointly
EXPERT RATIONALE: Medicaid is a joint federal-state program where both levels of
government contribute funding, with federal matching rates varying by state income
levels.
5. Which of the following is a characteristic of a single-payer healthcare
system?
A. Multiple private insurers compete for customers
B. Employers fund all healthcare costs
C. One public entity pays for all healthcare services
D. Patients pay entirely out of pocket
E. Hospitals set their own reimbursement rates
C. One public entity pays for all healthcare services
EXPERT RATIONALE: In a single-payer system, a single public or quasi-public agency
organizes healthcare financing, eliminating the fragmentation of multiple payers.
6. The term "adverse selection" in health insurance refers to:
A. Insurers choosing the healthiest patients
B. High-risk individuals being more likely to seek insurance coverage
C. Physicians selecting the most profitable procedures
D. Government rejecting high-cost claims
E. Hospitals denying care to uninsured patients
, B. High-risk individuals being more likely to seek insurance coverage
EXPERT RATIONALE: Adverse selection occurs when people with greater health needs
are more likely to purchase insurance, potentially destabilizing insurance pools and
increasing premiums.
7. Which model of healthcare delivery focuses on coordinating care across
multiple providers to improve quality and reduce costs?
A. Fee-for-service
B. Accountable Care Organization (ACO)
C. Indemnity insurance
D. Capitation-only model
E. Direct primary care
B. Accountable Care Organization (ACO)
EXPERT RATIONALE: ACOs are groups of providers that work together to coordinate
care for Medicare patients, sharing in savings when they reduce costs while meeting
quality benchmarks.
8. Which of the following best defines "health equity"?
A. All patients receiving identical treatments
B. Equal distribution of hospitals across states
C. The attainment of the highest level of health for all people regardless of social
position
D. Uniform insurance premiums for all demographics
E. Elimination of all copayments
C. The attainment of the highest level of health for all people regardless of
social position
Exam Study Guide 2026 | Nursing Healthcare
Systems and Policy Exam Questions and Answers
• This 200-question practice exam covers all core domains of D523 Healthcare
Policy and Economics, designed to mirror the depth and rigor of the actual WGU
nursing licensure assessment.
• Use this material by attempting each question independently before checking the
highlighted correct answer and EXPERT RATIONALE — this active recall method
maximizes retention and exam readiness.
D523 Healthcare Policy and Economics — Practice Exam 200 Multiple Choice
Questions
1. Which of the following best describes the primary goal of healthcare policy?
A. To maximize hospital profits
B. To regulate pharmaceutical pricing exclusively
C. To allocate healthcare resources and improve population health outcomes
D. To eliminate the role of private insurance
E. To standardize physician salaries nationally
C. To allocate healthcare resources and improve population health
outcomes
EXPERT RATIONALE: Healthcare policy is fundamentally concerned with how resources
are distributed across a population to improve overall health outcomes, access, and
equity — not limited to any single sector.
2. The Affordable Care Act (ACA) was primarily designed to:
A. Eliminate Medicare and Medicaid
,B. Privatize all public hospitals
C. Expand health insurance coverage and reduce the number of uninsured
Americans
D. Replace employer-sponsored insurance
E. Limit coverage to individuals under age 65
C. Expand health insurance coverage and reduce the number of uninsured
Americans
EXPERT RATIONALE: The ACA's core goals included expanding Medicaid, creating
insurance marketplaces, and implementing consumer protections to reduce the
uninsured rate.
3. Which economic concept refers to the idea that individuals tend to overuse
healthcare services when they do not bear the full cost?
A. Adverse selection
B. Price elasticity
C. Opportunity cost
D. Moral hazard
E. Marginal utility
D. Moral hazard
EXPERT RATIONALE: Moral hazard occurs when insured individuals consume more
healthcare than they would if they paid full costs, because insurance reduces the
financial consequences of their decisions.
4. Medicaid is primarily funded by:
A. Individual taxpayer premiums
B. Hospital endowments
,C. Federal and state governments jointly
D. The Federal Reserve
E. Private insurance companies
C. Federal and state governments jointly
EXPERT RATIONALE: Medicaid is a joint federal-state program where both levels of
government contribute funding, with federal matching rates varying by state income
levels.
5. Which of the following is a characteristic of a single-payer healthcare
system?
A. Multiple private insurers compete for customers
B. Employers fund all healthcare costs
C. One public entity pays for all healthcare services
D. Patients pay entirely out of pocket
E. Hospitals set their own reimbursement rates
C. One public entity pays for all healthcare services
EXPERT RATIONALE: In a single-payer system, a single public or quasi-public agency
organizes healthcare financing, eliminating the fragmentation of multiple payers.
6. The term "adverse selection" in health insurance refers to:
A. Insurers choosing the healthiest patients
B. High-risk individuals being more likely to seek insurance coverage
C. Physicians selecting the most profitable procedures
D. Government rejecting high-cost claims
E. Hospitals denying care to uninsured patients
, B. High-risk individuals being more likely to seek insurance coverage
EXPERT RATIONALE: Adverse selection occurs when people with greater health needs
are more likely to purchase insurance, potentially destabilizing insurance pools and
increasing premiums.
7. Which model of healthcare delivery focuses on coordinating care across
multiple providers to improve quality and reduce costs?
A. Fee-for-service
B. Accountable Care Organization (ACO)
C. Indemnity insurance
D. Capitation-only model
E. Direct primary care
B. Accountable Care Organization (ACO)
EXPERT RATIONALE: ACOs are groups of providers that work together to coordinate
care for Medicare patients, sharing in savings when they reduce costs while meeting
quality benchmarks.
8. Which of the following best defines "health equity"?
A. All patients receiving identical treatments
B. Equal distribution of hospitals across states
C. The attainment of the highest level of health for all people regardless of social
position
D. Uniform insurance premiums for all demographics
E. Elimination of all copayments
C. The attainment of the highest level of health for all people regardless of
social position
