CEBS GBA 2 QUESTIONS AND 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 - 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
_________________ 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
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
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
True or False: Medicare Part D plans offer similar coverage at a similar cost. - Answers
: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? -
Answers :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. -
Answers :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? - Answers :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? - Answers :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? - Answers :Health Maintenance
Organization (HMO) plan
What is considered the primary drawback of the HMO delivery model? - Answers
:HMOs include a limited network of providers with a primary care physician who
authorizes all services.
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
_________________ 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
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
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
True or False: Medicare Part D plans offer similar coverage at a similar cost. - Answers
: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? -
Answers :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. -
Answers :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? - Answers :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? - Answers :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? - Answers :Health Maintenance
Organization (HMO) plan
What is considered the primary drawback of the HMO delivery model? - Answers
:HMOs include a limited network of providers with a primary care physician who
authorizes all services.
