CEBS GBA 2 Test Questions Solved Correctly Latest Update 2025 Graded A+
Which of the following are distinguishing characterstics that make health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or government
agencies, insulating patients from health care costs.
f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e - Answers Which of the following are distinguishing characterstics that make
health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or government
agencies, insulating patients from health care costs.
f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e
What are the 4 distinct characteristics of insurance? - Answers 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? - Answers 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. - Answers
random
What is the sole exception to the element of risk transfer, assuming the risk itself rather than an
insurance company? - Answers self-insurance
_____________________ restores the individual to their preexisting state had the loss not occurred. -
Answers indemnification
________________ occurs because individuals and businesses are more likely to have claims, and more
inclined to purchase insurance, than those who are less likely to have claims. - Answers Adverse
selection
True or False: Adverse selection, if unchecked, will lead toward more healthy individuals seeking
insurance and lowering premiums. - Answers False: Adverse selection, if unchecked, will lead toward
more sick individuals seeking insurance, driving up insurance premiums, and then even fewer healthy
individuals will purchase, continuing the spiral of higher costs.
True or False: Adverse selection occurs when individual buyers of health insurance know more about
their health status than do insurers. - Answers True
_______________ is the problem faced by insurers because individuals are more likely to use unneeded
health services when they are not paying the full cost of those services. - Answers Moral hazard
What is the primary tool that insurers have to combat the moral hazard problem? - Answers
Coinsurancce (%) and copayments ($)
What is the generic term for any outside party, typically an insurance company or a a government
program, which pays for part or all of a patient's health care services? - Answers third-party payer
What are the two broad categories of health insurers? - Answers 1) Private insurers
2) Public programs / insurers
What are the 3 major private insurers? - Answers 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 - Answers 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 - Answers c) Blue Shield
What type of health insurance is issued by life insurance companies, casualty insurance companies, and
companies formed exclusively to offer health care insurance? - Answers commercial health insurance
True or False: Commercial insurance companies are taxable (for-profit) entities. - Answers True
True or False: Following World War II, the Internal Revenue Service ruled that employer-provided health
insurance was taxable. - Answers 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. - Answers True
V.A. benefits, the TRICARE program, HHS, Medicare, and Medicaid are all examples of:
a) Public programs / insurers
b) Private insurers - Answers a) Public programs / insurers
Which program was established by Congress in 1965 primarily to provide medical benefits to individuals
age 65 or older? - Answers 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 - Answers 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
d) Part D - Answers Part B
Which Part of Medicare coverage is considered managed care coverage offered by private insurance
companies? - Answers Part C
Which Part of Medicare coverarage offers prescription drug coverage? - Answers 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 - Answers 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 - Answers Part B
What is another name for Medicare Part C, which can be selected in lieu of Parts A and B? - Answers
Medicare Advantage Plans
Which of the following are distinguishing characterstics that make health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or government
agencies, insulating patients from health care costs.
f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e - Answers Which of the following are distinguishing characterstics that make
health care unique?
a) Often only a few providers of a particular service exist in a given area.
b) It is easy to judge the quality and cost of competing services with new tools that facilitate
comparison.
c) The decision about which services to purchase is usually made by a physician or other clinician.
d) Full payment to the provider is made by the consumer rather than a health care insurer.
e) 3rd-party health insurance for most individuals is paid for or subsidized by employers or government
agencies, insulating patients from health care costs.
f) all of the above
g) a and b only
h) a, c, and e
i) a, b, c, and d, but not e
What are the 4 distinct characteristics of insurance? - Answers 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? - Answers 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. - Answers
random
What is the sole exception to the element of risk transfer, assuming the risk itself rather than an
insurance company? - Answers self-insurance
_____________________ restores the individual to their preexisting state had the loss not occurred. -
Answers indemnification
________________ occurs because individuals and businesses are more likely to have claims, and more
inclined to purchase insurance, than those who are less likely to have claims. - Answers Adverse
selection
True or False: Adverse selection, if unchecked, will lead toward more healthy individuals seeking
insurance and lowering premiums. - Answers False: Adverse selection, if unchecked, will lead toward
more sick individuals seeking insurance, driving up insurance premiums, and then even fewer healthy
individuals will purchase, continuing the spiral of higher costs.
True or False: Adverse selection occurs when individual buyers of health insurance know more about
their health status than do insurers. - Answers True
_______________ is the problem faced by insurers because individuals are more likely to use unneeded
health services when they are not paying the full cost of those services. - Answers Moral hazard
What is the primary tool that insurers have to combat the moral hazard problem? - Answers
Coinsurancce (%) and copayments ($)
What is the generic term for any outside party, typically an insurance company or a a government
program, which pays for part or all of a patient's health care services? - Answers third-party payer
What are the two broad categories of health insurers? - Answers 1) Private insurers
2) Public programs / insurers
What are the 3 major private insurers? - Answers 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 - Answers 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 - Answers c) Blue Shield
What type of health insurance is issued by life insurance companies, casualty insurance companies, and
companies formed exclusively to offer health care insurance? - Answers commercial health insurance
True or False: Commercial insurance companies are taxable (for-profit) entities. - Answers True
True or False: Following World War II, the Internal Revenue Service ruled that employer-provided health
insurance was taxable. - Answers 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. - Answers True
V.A. benefits, the TRICARE program, HHS, Medicare, and Medicaid are all examples of:
a) Public programs / insurers
b) Private insurers - Answers a) Public programs / insurers
Which program was established by Congress in 1965 primarily to provide medical benefits to individuals
age 65 or older? - Answers 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 - Answers 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
d) Part D - Answers Part B
Which Part of Medicare coverage is considered managed care coverage offered by private insurance
companies? - Answers Part C
Which Part of Medicare coverarage offers prescription drug coverage? - Answers 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 - Answers 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 - Answers Part B
What is another name for Medicare Part C, which can be selected in lieu of Parts A and B? - Answers
Medicare Advantage Plans
