CFEI STUDYGUIDE EXAM LATEST 2025 WITH CORRECT QUESTIONS AND DETAILED
ANSWERS/ALREADY GRADED A+
Health vs. Health care - (answer)Well being - physical and mental not just being disease free; the other is
the system that helps ensure this
Scarcity - (answer)Dividing resources by using prices; supply and demand; infinite number of needs and
limited resources; in HP goods are more regulated than market driven
The leading insurance companies in the US in the 1920s were against compulsory health insurance
because of the inclusion of a funeral benefit - (answer)True
The American Federation of Labor, lead by Samuel Gompers, championed Compulsory health insurance
coverage for all workers - (answer)False
The American Medical Association responded to the Great Depression by restricting the supply of
doctors rather than stimulating demand for physicians' services. - (answer)True
Increased state and federal funding for medical services of the poor started with the passage of
Medicaid in 1965. - (answer)False
Post WW II, veterans were able to win support not only for treatment of their service-related injuries
but for all of their medical care needs, largely because of AMA support. - (answer)False
Blue cross started off as an insurance program that covered hospital costs only - (answer)true
The AMA is legally allowed to collectively bargain with managed care organizations on behalf of its
members over doctor fees. - (answer)False
High deductible plans promote adverse selection. - (answer)true
Medicare's prospective payment system has increased hospitalization rates. - (answer)False
In America, physicians have always enjoyed an esteemed position in society. - (answer)False
The goal of insurance is to give an individual financial risk protection - (answer)True
market equilibrium occurs when supply is greater than the demand - (answer)false
all individuals consider societal welfare when maximizing their own utility - (answer)false
Moral hazard occurs when individuals do not consider opportunity costs - (answer)false
cost sharing in health insurance is a form of supply side tool to control moral hazard - (answer)false
Asymmetry of information can lead to market inefficiencies - (answer)True
In the principal-agent relationship, the principal can easily monitor the agent's behavior - (answer)False
Adverse selection occurs when insurance plans select low-risk and low-cost enrollees - (answer)True
The Opioid Epidemic has negative externalities on society - (answer)True
, CFEI STUDYGUIDE EXAM LATEST 2025 WITH CORRECT QUESTIONS AND DETAILED
ANSWERS/ALREADY GRADED A+
Collective-action problems get better as the group gets larger - (answer)False
Pay-for-performance policies are challenging to implement due to the following reasons - (answer)a.
Evaluating case mix and adjusting for risk are crude methods
b. Measuring outputs of medical interventions is difficult
c. Providers are skeptical about the accuracy of these measures
The following is true about the patient-provider interaction - (answer)a. The provider acts as an agent on
behalf of the patient.
b. Patients are not concerned that providers make treatment decisions based on profitability.
Insurers are very supportive of a single payer system - (answer)false
1. States do not have the flexibility and are discouraged from experimenting with health coverage
programs like Medicaid - (answer)false
1. The certificate of need (CON) increases the arms race among providers - (answer)False
Adverse selection - (answer)can lead to a death spiral in the insurance market
usually externalities in the market increase its efficiency - (answer)false
which does not address adverse selection - (answer)Cadillac tax
Price elasticity is influenced by the extent to which the good is a necesity - (answer)true
pharmaceutical drug tiering promoted what type of health care delivery? - (answer)value based
purchasing
Which of the following policies addresses moral hazard? - (answer)cadillac tax
Copayment coupons for drugs has increased national spending on all drugs. - (answer)true
Monopsony in the insurance market results in an increase in the wages of healthcare providers. -
(answer)false
The percentage of spending on personal healthcare that is paid out-of-pocket in the United States has
declined over the past 30 years. - (answer)true
Consumers benefit from insurance market consolidation because the insurers pass the savings from
treatment discounts they negotiate from providers back to consumers - (answer)true
Which of the following government programs is not paternalistic - (answer)unemployment
compensation
ANSWERS/ALREADY GRADED A+
Health vs. Health care - (answer)Well being - physical and mental not just being disease free; the other is
the system that helps ensure this
Scarcity - (answer)Dividing resources by using prices; supply and demand; infinite number of needs and
limited resources; in HP goods are more regulated than market driven
The leading insurance companies in the US in the 1920s were against compulsory health insurance
because of the inclusion of a funeral benefit - (answer)True
The American Federation of Labor, lead by Samuel Gompers, championed Compulsory health insurance
coverage for all workers - (answer)False
The American Medical Association responded to the Great Depression by restricting the supply of
doctors rather than stimulating demand for physicians' services. - (answer)True
Increased state and federal funding for medical services of the poor started with the passage of
Medicaid in 1965. - (answer)False
Post WW II, veterans were able to win support not only for treatment of their service-related injuries
but for all of their medical care needs, largely because of AMA support. - (answer)False
Blue cross started off as an insurance program that covered hospital costs only - (answer)true
The AMA is legally allowed to collectively bargain with managed care organizations on behalf of its
members over doctor fees. - (answer)False
High deductible plans promote adverse selection. - (answer)true
Medicare's prospective payment system has increased hospitalization rates. - (answer)False
In America, physicians have always enjoyed an esteemed position in society. - (answer)False
The goal of insurance is to give an individual financial risk protection - (answer)True
market equilibrium occurs when supply is greater than the demand - (answer)false
all individuals consider societal welfare when maximizing their own utility - (answer)false
Moral hazard occurs when individuals do not consider opportunity costs - (answer)false
cost sharing in health insurance is a form of supply side tool to control moral hazard - (answer)false
Asymmetry of information can lead to market inefficiencies - (answer)True
In the principal-agent relationship, the principal can easily monitor the agent's behavior - (answer)False
Adverse selection occurs when insurance plans select low-risk and low-cost enrollees - (answer)True
The Opioid Epidemic has negative externalities on society - (answer)True
, CFEI STUDYGUIDE EXAM LATEST 2025 WITH CORRECT QUESTIONS AND DETAILED
ANSWERS/ALREADY GRADED A+
Collective-action problems get better as the group gets larger - (answer)False
Pay-for-performance policies are challenging to implement due to the following reasons - (answer)a.
Evaluating case mix and adjusting for risk are crude methods
b. Measuring outputs of medical interventions is difficult
c. Providers are skeptical about the accuracy of these measures
The following is true about the patient-provider interaction - (answer)a. The provider acts as an agent on
behalf of the patient.
b. Patients are not concerned that providers make treatment decisions based on profitability.
Insurers are very supportive of a single payer system - (answer)false
1. States do not have the flexibility and are discouraged from experimenting with health coverage
programs like Medicaid - (answer)false
1. The certificate of need (CON) increases the arms race among providers - (answer)False
Adverse selection - (answer)can lead to a death spiral in the insurance market
usually externalities in the market increase its efficiency - (answer)false
which does not address adverse selection - (answer)Cadillac tax
Price elasticity is influenced by the extent to which the good is a necesity - (answer)true
pharmaceutical drug tiering promoted what type of health care delivery? - (answer)value based
purchasing
Which of the following policies addresses moral hazard? - (answer)cadillac tax
Copayment coupons for drugs has increased national spending on all drugs. - (answer)true
Monopsony in the insurance market results in an increase in the wages of healthcare providers. -
(answer)false
The percentage of spending on personal healthcare that is paid out-of-pocket in the United States has
declined over the past 30 years. - (answer)true
Consumers benefit from insurance market consolidation because the insurers pass the savings from
treatment discounts they negotiate from providers back to consumers - (answer)true
Which of the following government programs is not paternalistic - (answer)unemployment
compensation
