CEBS GBA 2 QUESTIONS WITH COMPLETE SOLUTIONS
GUARANTEED PASS BRAND NEW 2025
Benefits of STD group policies - ANSWER - >Ensures that
experienced professionals are managing claims, gives access to
return-to-work support and fraud-prevention services, and
locks in a fixed amount of monthly financial obligation
(premiums) regardless of the disability benefits being paid.
The law of large numbers states that: - ANSWER - >As the size
of the same increases, the sample mean gets closer to the
population mean.
Indemnification - ANSWER - >Indemnification of losses means
reimbursement to the insured if a loss occurs. In theory,
indemnification restores the individual to their preexisting state
had the loss not occurred.
Adverse Selection - ANSWER - >Occurs because individuals and
businesses that are more likely to have claims are more inclined
to purchase insurance than those that are less likely to have
claims. This exists because individuals know more about their
health status than do insurers.
Moral Hazard - ANSWER - >Premise that payments are made
only for random losses which creates moral hazard. Moral
hazard is faced by insurers because individuals are more likely
to use unneeded health services when they are not paying the
full cost of those services.
,Coinsurance - ANSWER - >A type of insurance in which the
insured pays a share of the payment made against a claim in
excess of the deductible.
Third-Party Payers - ANSWER - >Generic term for any outside
party, insurance company or a government program, which
pays for part or all of a patient's health care services. Health
insurers can be categorized into two broad groupings: private
insurers and public programs.
Medicare - ANSWER - >A federal program of health insurance
established by Congress in 1965 to provide medical benefits to
persons 65 years of age and older. Also covers health care costs
associated with selected disabilities and illnesses, regardless of
age.
Medicaid - ANSWER - >Began in 1966. A federal and state
assistance program that pays for health care services for people
who cannot afford them. Mandatory nursing home benefit
added in 1972.
Four Characteristics of Insurance - ANSWER - >1. Pooling of
losses.
2. Payment only for random losses.
3. Risk transfer.
4. Indemnification
,Pooling of losses - ANSWER - >Is the basis of insurance. Pooling
= losses are spread over a large group of individuals. Pooling
involves the grouping of a large number of homogeneous
exposure units. People or things having the same risk
characteristics. Law of large numbers applies.
Payment only for random losses - ANSWER - >A random loss is
one that is unforeseen and unexpected and occurs as a result of
chance. With insurance, payments are made only for random
losses.
Risk transfer - ANSWER - >The transfer of risk from an insured
to an insurer. Insurance involves risk transfer. The exception to
risk transfer is self-insurance. The insurer is in a better financial
position to bear the risk than the insured because of the law of
large numbers.
Private Insurers - ANSWER - >Blue Cross/Blue Shield,
Commercial Insurers, and Self-insurers.
Blue Cross Blue Shield - ANSWER - >Blue Cross Blue Shield
organizations trace their roots to the Great Depression, when
both hospitals and physicians were concerned about their
patients' ability to pay health care bills.
Blue Cross - ANSWER - >Multiple insurance programs offered by
hospitals. Hospitals provided services to program members
who made fixed payments to hospitals. Programs expanded
from single-hospital programs to multi-hospital plans called
, hospital service plans. The Blue Cross name was officially
adopted by most of these plans in 1939.
Blue Shield - ANSWER - >Similar to Blue Cross plans. Providers
were physicians not hospitals. 36 Blue Cross Blue Shield
organizations today. The Blues are independent corporations
that belong to a single national association with set standards.
The Blues provide health care coverage for 106 million
individuals.
Commercial Insurers - ANSWER - >Private, non-government
insurers who are often the insurance options available through
employers. All commercial insurance companies are taxable
(for-profit) entities.
Self-Insurers - ANSWER - >Establishes a self-funded plan to
cover potential losses instead of transferring the risk to an
insurance company. Large groups, especially employers, are
good candidates for self insurance. Today, most large groups
are self-insured.
Public Insurers - ANSWER - >Government is a major insurer and
direct provider of health care services. Government provides
health care services through the U.S. Department of Veterans
Affairs, the U.S. Department of Defense and TRICARE program.
The government provides or mandates insurance programs,
such as workers' compensation, Medicare and Medicaid.
GUARANTEED PASS BRAND NEW 2025
Benefits of STD group policies - ANSWER - >Ensures that
experienced professionals are managing claims, gives access to
return-to-work support and fraud-prevention services, and
locks in a fixed amount of monthly financial obligation
(premiums) regardless of the disability benefits being paid.
The law of large numbers states that: - ANSWER - >As the size
of the same increases, the sample mean gets closer to the
population mean.
Indemnification - ANSWER - >Indemnification of losses means
reimbursement to the insured if a loss occurs. In theory,
indemnification restores the individual to their preexisting state
had the loss not occurred.
Adverse Selection - ANSWER - >Occurs because individuals and
businesses that are more likely to have claims are more inclined
to purchase insurance than those that are less likely to have
claims. This exists because individuals know more about their
health status than do insurers.
Moral Hazard - ANSWER - >Premise that payments are made
only for random losses which creates moral hazard. Moral
hazard is faced by insurers because individuals are more likely
to use unneeded health services when they are not paying the
full cost of those services.
,Coinsurance - ANSWER - >A type of insurance in which the
insured pays a share of the payment made against a claim in
excess of the deductible.
Third-Party Payers - ANSWER - >Generic term for any outside
party, insurance company or a government program, which
pays for part or all of a patient's health care services. Health
insurers can be categorized into two broad groupings: private
insurers and public programs.
Medicare - ANSWER - >A federal program of health insurance
established by Congress in 1965 to provide medical benefits to
persons 65 years of age and older. Also covers health care costs
associated with selected disabilities and illnesses, regardless of
age.
Medicaid - ANSWER - >Began in 1966. A federal and state
assistance program that pays for health care services for people
who cannot afford them. Mandatory nursing home benefit
added in 1972.
Four Characteristics of Insurance - ANSWER - >1. Pooling of
losses.
2. Payment only for random losses.
3. Risk transfer.
4. Indemnification
,Pooling of losses - ANSWER - >Is the basis of insurance. Pooling
= losses are spread over a large group of individuals. Pooling
involves the grouping of a large number of homogeneous
exposure units. People or things having the same risk
characteristics. Law of large numbers applies.
Payment only for random losses - ANSWER - >A random loss is
one that is unforeseen and unexpected and occurs as a result of
chance. With insurance, payments are made only for random
losses.
Risk transfer - ANSWER - >The transfer of risk from an insured
to an insurer. Insurance involves risk transfer. The exception to
risk transfer is self-insurance. The insurer is in a better financial
position to bear the risk than the insured because of the law of
large numbers.
Private Insurers - ANSWER - >Blue Cross/Blue Shield,
Commercial Insurers, and Self-insurers.
Blue Cross Blue Shield - ANSWER - >Blue Cross Blue Shield
organizations trace their roots to the Great Depression, when
both hospitals and physicians were concerned about their
patients' ability to pay health care bills.
Blue Cross - ANSWER - >Multiple insurance programs offered by
hospitals. Hospitals provided services to program members
who made fixed payments to hospitals. Programs expanded
from single-hospital programs to multi-hospital plans called
, hospital service plans. The Blue Cross name was officially
adopted by most of these plans in 1939.
Blue Shield - ANSWER - >Similar to Blue Cross plans. Providers
were physicians not hospitals. 36 Blue Cross Blue Shield
organizations today. The Blues are independent corporations
that belong to a single national association with set standards.
The Blues provide health care coverage for 106 million
individuals.
Commercial Insurers - ANSWER - >Private, non-government
insurers who are often the insurance options available through
employers. All commercial insurance companies are taxable
(for-profit) entities.
Self-Insurers - ANSWER - >Establishes a self-funded plan to
cover potential losses instead of transferring the risk to an
insurance company. Large groups, especially employers, are
good candidates for self insurance. Today, most large groups
are self-insured.
Public Insurers - ANSWER - >Government is a major insurer and
direct provider of health care services. Government provides
health care services through the U.S. Department of Veterans
Affairs, the U.S. Department of Defense and TRICARE program.
The government provides or mandates insurance programs,
such as workers' compensation, Medicare and Medicaid.
