CEBS GBA 2 Exam Questions and Answers | Verified
/ 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)
/.What is Medicare Part C and why do some people select it? (Mod 1.4) - Answer-AKA
Medicare Advantage:
-Recipients have the option to enroll in a health plan with a narrowed network of
hospitals and providers that covers Part A and B but with lower out of pocket costs.
These plans often include their own prescription drug coverage. Unlike Part D, this is a
voluntary choice and beneficiaries always have the option of going back to the
traditional plan. It is a choice to restrict options and consolidate the different elements of
Medicare, including cost sharing.
People select these plans because of lower costs and greater care coordination. Like
Part D, Part C has significant state variation.
/.What have researchers found with regard to consumer benefits and efficiency of
Medicare Part C? (Mod 1.4) - Answer-45 studies - in general that Part C's HMO and
PPO programs have a better record than traditional fee for service plans in the provision
of preventive services and the more efficient use of resources. Despite high
performance, a sub-group of sick beneficiaries in traditional Medicare tends to rate their
, care more favorably than beneficiaries in Part C - due to easier access to specialists.
Compared to Part D (which provides a separate, uncoordinated prescription drug
benefit), choice here is less complex and could lead to greater consumer benefits and
efficiency.
/.Discuss consumer choices for Physicians and Hospitals in the Medicaid Program (Mod
1.4) - Answer-Federal government mandates open choice to both Phys & Hospitals;
however, in the 90s, states could obtain waivers for this provision and require Medicaid
recipients to enroll in a limited-network managed care plan (most states did).
Continued movement to Medicaid Managed Care Organizations (MMCOs) - with
comprehensive coverage paid on a risk basis.
MMCOs receive a per-member, per-person payment to provide defined set of benefits
for all. Traditionally, Medicaid pays physicians much less than private insurance or
Medicare - this limits the number of physicians who may take Medicaid, which will limit
choice.
/.What is the difference between Medicare and Medicaid? (Mod 1.4 - Reading) -
Answer-Medicare: Medicare is a federal program attached to Social Security. It is
available to all U.S. citizens 65 years of age or older and it also covers people with
certain disabilities. It is available regardless of income.
Medicaid: Medicaid is a joint federal and state program that helps low-income
individuals and families pay for the costs associated with medical and long-term
custodial care. The federal government funds up to 50% of the cost of each state's
Medicaid program, with more affluent states receiving less funding than less affluent
states. Because of this federal/state partnership, there are actually 50 different Medicaid
programs, one for each state.
Medicaid is also often used to fund long-term care, which is not covered by Medicare or
by most private health insurance policies. In fact, Medicaid is the nation's largest single
source of long-term care funding.
/.Summarize ACA with regard to:
1) Pay or Play Mandate
2) Minimum Level of Benefits (Mod 1.5) - Answer-1) ERs with 50+ EE's who work at
least 30 Hrs/Week on Average; gives ER choice to pay or play with respect to
sponsoring EE Benefits. ER who fail to offer qualified health benefits to EEs must pay a
penalty per EE per year. EEs who are cut loose by ERs who pay the penalty must
obtain coverage elsewhere bc of the individual mandate, or they will pay a penalty too -
can purchase a plan on state/federal exchange, with tax subsidies available for low to
middle income individuals. If EE chooses to play, must follow all rules of ACA.
2) ER covers at least 60% of covered expenses, expressed as actuarial value of 60%.
Considered a floor because they represent the bottom/min level of benefit that can be
offered to EEs with triggering penalties.
/ 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)
/.What is Medicare Part C and why do some people select it? (Mod 1.4) - Answer-AKA
Medicare Advantage:
-Recipients have the option to enroll in a health plan with a narrowed network of
hospitals and providers that covers Part A and B but with lower out of pocket costs.
These plans often include their own prescription drug coverage. Unlike Part D, this is a
voluntary choice and beneficiaries always have the option of going back to the
traditional plan. It is a choice to restrict options and consolidate the different elements of
Medicare, including cost sharing.
People select these plans because of lower costs and greater care coordination. Like
Part D, Part C has significant state variation.
/.What have researchers found with regard to consumer benefits and efficiency of
Medicare Part C? (Mod 1.4) - Answer-45 studies - in general that Part C's HMO and
PPO programs have a better record than traditional fee for service plans in the provision
of preventive services and the more efficient use of resources. Despite high
performance, a sub-group of sick beneficiaries in traditional Medicare tends to rate their
, care more favorably than beneficiaries in Part C - due to easier access to specialists.
Compared to Part D (which provides a separate, uncoordinated prescription drug
benefit), choice here is less complex and could lead to greater consumer benefits and
efficiency.
/.Discuss consumer choices for Physicians and Hospitals in the Medicaid Program (Mod
1.4) - Answer-Federal government mandates open choice to both Phys & Hospitals;
however, in the 90s, states could obtain waivers for this provision and require Medicaid
recipients to enroll in a limited-network managed care plan (most states did).
Continued movement to Medicaid Managed Care Organizations (MMCOs) - with
comprehensive coverage paid on a risk basis.
MMCOs receive a per-member, per-person payment to provide defined set of benefits
for all. Traditionally, Medicaid pays physicians much less than private insurance or
Medicare - this limits the number of physicians who may take Medicaid, which will limit
choice.
/.What is the difference between Medicare and Medicaid? (Mod 1.4 - Reading) -
Answer-Medicare: Medicare is a federal program attached to Social Security. It is
available to all U.S. citizens 65 years of age or older and it also covers people with
certain disabilities. It is available regardless of income.
Medicaid: Medicaid is a joint federal and state program that helps low-income
individuals and families pay for the costs associated with medical and long-term
custodial care. The federal government funds up to 50% of the cost of each state's
Medicaid program, with more affluent states receiving less funding than less affluent
states. Because of this federal/state partnership, there are actually 50 different Medicaid
programs, one for each state.
Medicaid is also often used to fund long-term care, which is not covered by Medicare or
by most private health insurance policies. In fact, Medicaid is the nation's largest single
source of long-term care funding.
/.Summarize ACA with regard to:
1) Pay or Play Mandate
2) Minimum Level of Benefits (Mod 1.5) - Answer-1) ERs with 50+ EE's who work at
least 30 Hrs/Week on Average; gives ER choice to pay or play with respect to
sponsoring EE Benefits. ER who fail to offer qualified health benefits to EEs must pay a
penalty per EE per year. EEs who are cut loose by ERs who pay the penalty must
obtain coverage elsewhere bc of the individual mandate, or they will pay a penalty too -
can purchase a plan on state/federal exchange, with tax subsidies available for low to
middle income individuals. If EE chooses to play, must follow all rules of ACA.
2) ER covers at least 60% of covered expenses, expressed as actuarial value of 60%.
Considered a floor because they represent the bottom/min level of benefit that can be
offered to EEs with triggering penalties.
