HPA 210 Quiz 4 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Is a big firm or small firm more likely to offer coverage? - CORRECT ANSWER - Big
Situation in which the buyers and sellers of an insurance product do not have the same
information available. Ex: when a person waits until he knows he is sick and in need of health
care before applying for a health insurance policy - CORRECT ANSWER - Adverse
Selection
Among small employers not offering ESHI, what percent reimburse employees for some or all of
the cost of non-group health insurance? - CORRECT ANSWER - 9%
What are some reasons a smaller firm would offer health insurance? - CORRECT
ANSWER - Right thing to do, helps recruitment, owner coverage and decreased turnover
What are some reasons employers do NOT offer health insurance? - CORRECT
ANSWER - Business' can't afford it, revenue too uncertain. employees have coverage
elsewhere, high turnover, employees prefer wages or too complicated
What percent of employers use a broker? - CORRECT ANSWER - 68%
What do brokers do? - CORRECT ANSWER - Explain coverage & investigate options,
resolve claim questions and disputes with insurers, and UNDERWRITE for the carrier
Underwriting - CORRECT ANSWER - look up
What is one way to deal with adverse selection? - CORRECT ANSWER - Provide
agents/brokers with incentives to write policies for low risk groups
, What raises considerable uncertainty about future role? - CORRECT ANSWER -
Exchanges and "navigators"
What is a concern if brokers/agents steer high risks into exchanges and low risks into non-
exchange plans? - CORRECT ANSWER - Field underwriting
A 1 % increase in the SINGLE coverage premium led to a _______ decrease in the probability of
offering single coverage - CORRECT ANSWER - 3.9 percent decrease
A 1 percent increase in FAMILY coverage premium led to a _______ decrease in the probability
of offering family coverage - CORRECT ANSWER -
Firm level responsiveness declines with - CORRECT ANSWER - larger firm size
larger percentage of high wage workers
higher average family income
Bare bones coverage - CORRECT ANSWER - exempt small firms from some or all state
insurance mandates
premium regulation - CORRECT ANSWER - - Rating brands for premiums
- Community and modified community rating
What provisions did HIPAA eliminate? - CORRECT ANSWER - Pre-existing conditions
stipulations and waiting periods
What defines objective risk? - CORRECT ANSWER - - Number of covered lives
- Expected claims experience
- Variance in claims experience
Exam Questions and CORRECT Answers
Is a big firm or small firm more likely to offer coverage? - CORRECT ANSWER - Big
Situation in which the buyers and sellers of an insurance product do not have the same
information available. Ex: when a person waits until he knows he is sick and in need of health
care before applying for a health insurance policy - CORRECT ANSWER - Adverse
Selection
Among small employers not offering ESHI, what percent reimburse employees for some or all of
the cost of non-group health insurance? - CORRECT ANSWER - 9%
What are some reasons a smaller firm would offer health insurance? - CORRECT
ANSWER - Right thing to do, helps recruitment, owner coverage and decreased turnover
What are some reasons employers do NOT offer health insurance? - CORRECT
ANSWER - Business' can't afford it, revenue too uncertain. employees have coverage
elsewhere, high turnover, employees prefer wages or too complicated
What percent of employers use a broker? - CORRECT ANSWER - 68%
What do brokers do? - CORRECT ANSWER - Explain coverage & investigate options,
resolve claim questions and disputes with insurers, and UNDERWRITE for the carrier
Underwriting - CORRECT ANSWER - look up
What is one way to deal with adverse selection? - CORRECT ANSWER - Provide
agents/brokers with incentives to write policies for low risk groups
, What raises considerable uncertainty about future role? - CORRECT ANSWER -
Exchanges and "navigators"
What is a concern if brokers/agents steer high risks into exchanges and low risks into non-
exchange plans? - CORRECT ANSWER - Field underwriting
A 1 % increase in the SINGLE coverage premium led to a _______ decrease in the probability of
offering single coverage - CORRECT ANSWER - 3.9 percent decrease
A 1 percent increase in FAMILY coverage premium led to a _______ decrease in the probability
of offering family coverage - CORRECT ANSWER -
Firm level responsiveness declines with - CORRECT ANSWER - larger firm size
larger percentage of high wage workers
higher average family income
Bare bones coverage - CORRECT ANSWER - exempt small firms from some or all state
insurance mandates
premium regulation - CORRECT ANSWER - - Rating brands for premiums
- Community and modified community rating
What provisions did HIPAA eliminate? - CORRECT ANSWER - Pre-existing conditions
stipulations and waiting periods
What defines objective risk? - CORRECT ANSWER - - Number of covered lives
- Expected claims experience
- Variance in claims experience
