CEBS GBA 1 FINAL EXAM ACTUAL QUESTIONS AND
ANSWERS GRADED A+
✔✔Evaluate the impact of ACA on CDHPs (Mod 4.1) - ✔✔ACA created uncertainty on
CDHPs because of concern they would not meet minimum actuarial requirements of the
act (package of min essential benefits w/act value of 60%) - 1/2 enrolled didn't meet min
benefits.
ACA also made regulatory changes - penalty HSA risen from 10 to 20% & over the
counter meds cannot be used for reimbursement on flexible spending accounts.
CDHPs still remain strong in post-ACA.
✔✔Enrollment trends in HDHPs with HSAs vs HDHPs with HRAs (Mod 4.2) - ✔✔Many
more firms offer HSAs (20%) than HRAs (7%). HRAs still remain attractive as they offer
greater flexibility in product design due to less strict regulations (HSA linked to
"qualified" HDHP) - accounts also act as savings account if EE switches
plans/terminates.
✔✔Effect of firm size on CDHP / Enrollment trends on group/individual market (Mod
4.2) - ✔✔Large firms more likely to offer CDHP than small/medium - enrollment has
increased in both individual and group, but more rapidly in group.
✔✔How do CDHP premiums compare to those of other plans? (Mod 4.2) - ✔✔CDHP
premiums generally lower due to 3 main factors:
1: Extent to which services are financed by out of pocket payments
2: Differences in health status among enrollees
3: Prices of services used by enrollees, conditional on health status.
✔✔Compare premiums, contributions and deductibles of HDHP/HRAs vs HDHP/HSAs
(Mod 4.2) - ✔✔HDHP/HSAs tend to have lower premiums, lower employee
contributions and higher deductibles than HDHP/HRAs. EE's own control of HSA, while
ER controls HRA.
✔✔Describe concern of CDHP risk segmentation and summarize two ways in which it
may occur (Mod 4.3) - ✔✔Concern is development of CDHP's will generate greater risk
selection since this product is more attractive to low-risk (healthier) enrollees - early
experience did reflect this.
Two ways it may occur: (Asymmetric info b/w insurer & enrollees) - insurers have
incentives to design policies that will cause consumers to self-select into coverage
based on their risk. (Low and High Risk Participants have different preferences for
coverage).
,✔✔Is risk selection among employer groups an issue for large or small employers?
(Mod 4.3) - ✔✔More an issue for large employers with multiple plans. Small employer
likely to offer CDHP on a full-replacement basis.
✔✔Describe how CDHPs impact spending and describe the resulting reductions (Mod
4.4) - ✔✔CDHPs reduce healthcare spending substantially beyond the first year -
primarily in low and medium risks (healthier enrollees). This is primarily driven by
reductions in pharmaceutical and outpatient expenditures. In drug utilization,
concentrated on drugs with asymptomatic (carrier, no symptoms) conditions -
hypertension, high cholesterol - only modest reductions w/chronic conditions. Outpatient
utilization declined in med to high risks.
✔✔Identify the affects CDHPs have on preventative and healthcare services (Mod 4.4) -
✔✔CDHPs generate few/no reductions when use of preventative services are not
subject to the deductible (Ex: Colonoscopy subj to ded, alternative option used).
Reduce use of less clinically appropriate care - RAND's Health Insurance Experiment
(HIE) conducted btw '71-'82 (analyzed effects of cost sharing on service us/quality of
care/health), one study shows CDHP enrollment led to reductions in physician visits for
acute and chronic conditions and high/low priority.
✔✔What is impact of healthcare use dependent on employer contributions in the form of
HSA/HRAs (Mod 4.4) - ✔✔Plans w/higher deductible and less generous HRAs generate
large reductions in spending.
Cost savings = higher deductibles
Long Term Reductions in CDHPs associated with smaller contributions to spending
accounts and for plans with higher deductibles offering HSAs as opposed to HRAs.
✔✔To what extent have tools been provided to CDHP enrollees? (Mod 4.5) -
✔✔CDHPs intended to control costs by shifting responsibility of health decisions to
consumer. Most disappointing area of movement, tools have been lacking. Few allow
enrollees to compare cost and quality across hospitals - even less with physicians.
Costs are based on averages and estimates are procedure based rather than episode
based.
Enrollees with chronic illness more likely to use tools.
✔✔How well do CDHP enrollees understand their plan features as well as control
costs? (Mod 4.5) - ✔✔Limited understanding, especially between salaried and hourly
EE's. Faced barriers in costs, especially when seeking care of urgent problems,
reluctance to discuss cost with doctors and inaccurate knowledge about what was
covered. After meeting doc, felt had no ability to control costs.
,✔✔Describe differences between medicine and dentistry (Mod 5.1) - ✔✔1: Physicians
practice in groups while dentists are solo.
2: Dental care is preventative and routine (2+ times a year); many people don't visit
doctor for years (only when symptoms present).
3: Dental treatment is elective and is sometimes is postponed.
4: Dental treatment never life threatening, charges can be discussed in advance.
5: Dental care often cosmetic.
6: Dentistry often offers variety of alternative treatments that are equally effective but
vary in cost.
7: Dental expenses generally lower, budgetable
8: Greater emphasis on prevention in dentistry than in general medicine.
Under ACA, dentist coverage is not essential benefit for adults.
✔✔Who covers dental? (Mod 5.1) - ✔✔1: Insurance Companies (MetLife 12%)
2: BlueCross/BlueShield (11%)
3: Others, like State Dental Associations (Delta Dental: 31%), Self-Admin, etc
✔✔Discuss how dental plans resemble medical plans (Mod 5.1) - ✔✔Three basic
approaches:
1: Fee for service indemnity
2: PPO (Preferred Provider)
3: Dental Health Maintenance Org
-PPO prevailing (fee for service disappearing)
✔✔Identify the ten professional treatment categories (Mod 5.1) - ✔✔1: Diagnostic
(Routine Oral Exams/X-Rays)
2: Preventative (Cleanings)
3: Restorative (Filings)
4: Endodontics (Root Canal)
5: Periodontics (Gums)
6: Oral Surgery (Wisdom Teeth Extraction)
7: Prosthodontics (Crowns, Bridges, Dentures)
8: Orthodontics (Braces)
9: Pedodontics (Children w/o all perm teeth)
10: Impantology (Impants)
-In addition, typical plan includes provisions for palliative treatment (minimize pain
w/anesthesia), emergency care, consultation
✔✔Identify groupings of the ten dental procedures (Mod 5.1) - ✔✔1: Preventative &
Diagnostic
2: Minor restorative
3: Often combined with (2), includes major restorative work (prosthodontics),
endodontics, periodontics and oral surgery
4: Orthodontic
5: Impantantology (typically excluded)
, -Pedodontic is in first two groupings
✔✔How does scheduled dental plan operate? (Mod 5.2) - ✔✔Pays fixed allowance for
each procedure ($50 for cleaning); may include deductibles (small, maybe lifetime)
-Advantages: Cost Control, Uniform Pay, Ease in understanding, employee relations
-Disadvantages: Levels must examined routinely, plan reimbursement will vary in
different locations according to cost in area, dentists may increase cost if scheduled
benefits are set near maximum of reasonable.
✔✔How does non-scheduled dental plan operate? (Mod 5.2) - ✔✔Most common, cover
percentage of usual (reasonable) charges in the community. Set between 75%-90%,
trend towards lower number. Typically include deductible during a plan year, reimburse
at different levels - preventative/diagnostic at 100%, then scaled down based on plan for
others.
-Advantage: Uniform percentage of total cost; built-in adjustment for inflation
-Disadvantage: Cost control, opportunities for modest benefit improvements limited,
rarely clear in advance what payment of service is.
✔✔Define a combination dental plan (Mod 5.2) - ✔✔Certain procedures on a scheduled
basis while some are on a non-scheduled basis.
✔✔Define an incentive dental plan (Mod 5.2) - ✔✔Program that incentivizes sound
dental hygiene through increasing reimbursement levels - only applies to preventative
and maintenance. When deductibles apply, only on lifetime basis.
✔✔Describe orthodontics plan benefits (Mod 5.3) - ✔✔Never written standalone.
Properly treated, unlikely to reoccur, so written with lifetime maximums. No deductible -
little consequence. Common coinsurance level is 50% - likely to be same level as major
restorative. Paid in installments.
✔✔Identify 3 factors that affect cost of dental plan and issues to be addressed in design
(Mod 5.4) - ✔✔Plan design, characteristics of covered group, employer's approach to
implementation
At design = type of plan, deductibles, max benefit, coinsurance, pre-x, ortho
✔✔What are advantages/disadvantages to lifetime deductibles in dental care (Mod 5.4)
- ✔✔Advantages: Avoiding the cost to the plan of accumulated dental neglect; must
invest in own dental health as a condition of adequate coverage
Disadvantages: Promotes early overutilization; once satisfied, no further value;
introduces employee turnover as cost consideration; may result in adverse reaction if
costs/premiums rise
ANSWERS GRADED A+
✔✔Evaluate the impact of ACA on CDHPs (Mod 4.1) - ✔✔ACA created uncertainty on
CDHPs because of concern they would not meet minimum actuarial requirements of the
act (package of min essential benefits w/act value of 60%) - 1/2 enrolled didn't meet min
benefits.
ACA also made regulatory changes - penalty HSA risen from 10 to 20% & over the
counter meds cannot be used for reimbursement on flexible spending accounts.
CDHPs still remain strong in post-ACA.
✔✔Enrollment trends in HDHPs with HSAs vs HDHPs with HRAs (Mod 4.2) - ✔✔Many
more firms offer HSAs (20%) than HRAs (7%). HRAs still remain attractive as they offer
greater flexibility in product design due to less strict regulations (HSA linked to
"qualified" HDHP) - accounts also act as savings account if EE switches
plans/terminates.
✔✔Effect of firm size on CDHP / Enrollment trends on group/individual market (Mod
4.2) - ✔✔Large firms more likely to offer CDHP than small/medium - enrollment has
increased in both individual and group, but more rapidly in group.
✔✔How do CDHP premiums compare to those of other plans? (Mod 4.2) - ✔✔CDHP
premiums generally lower due to 3 main factors:
1: Extent to which services are financed by out of pocket payments
2: Differences in health status among enrollees
3: Prices of services used by enrollees, conditional on health status.
✔✔Compare premiums, contributions and deductibles of HDHP/HRAs vs HDHP/HSAs
(Mod 4.2) - ✔✔HDHP/HSAs tend to have lower premiums, lower employee
contributions and higher deductibles than HDHP/HRAs. EE's own control of HSA, while
ER controls HRA.
✔✔Describe concern of CDHP risk segmentation and summarize two ways in which it
may occur (Mod 4.3) - ✔✔Concern is development of CDHP's will generate greater risk
selection since this product is more attractive to low-risk (healthier) enrollees - early
experience did reflect this.
Two ways it may occur: (Asymmetric info b/w insurer & enrollees) - insurers have
incentives to design policies that will cause consumers to self-select into coverage
based on their risk. (Low and High Risk Participants have different preferences for
coverage).
,✔✔Is risk selection among employer groups an issue for large or small employers?
(Mod 4.3) - ✔✔More an issue for large employers with multiple plans. Small employer
likely to offer CDHP on a full-replacement basis.
✔✔Describe how CDHPs impact spending and describe the resulting reductions (Mod
4.4) - ✔✔CDHPs reduce healthcare spending substantially beyond the first year -
primarily in low and medium risks (healthier enrollees). This is primarily driven by
reductions in pharmaceutical and outpatient expenditures. In drug utilization,
concentrated on drugs with asymptomatic (carrier, no symptoms) conditions -
hypertension, high cholesterol - only modest reductions w/chronic conditions. Outpatient
utilization declined in med to high risks.
✔✔Identify the affects CDHPs have on preventative and healthcare services (Mod 4.4) -
✔✔CDHPs generate few/no reductions when use of preventative services are not
subject to the deductible (Ex: Colonoscopy subj to ded, alternative option used).
Reduce use of less clinically appropriate care - RAND's Health Insurance Experiment
(HIE) conducted btw '71-'82 (analyzed effects of cost sharing on service us/quality of
care/health), one study shows CDHP enrollment led to reductions in physician visits for
acute and chronic conditions and high/low priority.
✔✔What is impact of healthcare use dependent on employer contributions in the form of
HSA/HRAs (Mod 4.4) - ✔✔Plans w/higher deductible and less generous HRAs generate
large reductions in spending.
Cost savings = higher deductibles
Long Term Reductions in CDHPs associated with smaller contributions to spending
accounts and for plans with higher deductibles offering HSAs as opposed to HRAs.
✔✔To what extent have tools been provided to CDHP enrollees? (Mod 4.5) -
✔✔CDHPs intended to control costs by shifting responsibility of health decisions to
consumer. Most disappointing area of movement, tools have been lacking. Few allow
enrollees to compare cost and quality across hospitals - even less with physicians.
Costs are based on averages and estimates are procedure based rather than episode
based.
Enrollees with chronic illness more likely to use tools.
✔✔How well do CDHP enrollees understand their plan features as well as control
costs? (Mod 4.5) - ✔✔Limited understanding, especially between salaried and hourly
EE's. Faced barriers in costs, especially when seeking care of urgent problems,
reluctance to discuss cost with doctors and inaccurate knowledge about what was
covered. After meeting doc, felt had no ability to control costs.
,✔✔Describe differences between medicine and dentistry (Mod 5.1) - ✔✔1: Physicians
practice in groups while dentists are solo.
2: Dental care is preventative and routine (2+ times a year); many people don't visit
doctor for years (only when symptoms present).
3: Dental treatment is elective and is sometimes is postponed.
4: Dental treatment never life threatening, charges can be discussed in advance.
5: Dental care often cosmetic.
6: Dentistry often offers variety of alternative treatments that are equally effective but
vary in cost.
7: Dental expenses generally lower, budgetable
8: Greater emphasis on prevention in dentistry than in general medicine.
Under ACA, dentist coverage is not essential benefit for adults.
✔✔Who covers dental? (Mod 5.1) - ✔✔1: Insurance Companies (MetLife 12%)
2: BlueCross/BlueShield (11%)
3: Others, like State Dental Associations (Delta Dental: 31%), Self-Admin, etc
✔✔Discuss how dental plans resemble medical plans (Mod 5.1) - ✔✔Three basic
approaches:
1: Fee for service indemnity
2: PPO (Preferred Provider)
3: Dental Health Maintenance Org
-PPO prevailing (fee for service disappearing)
✔✔Identify the ten professional treatment categories (Mod 5.1) - ✔✔1: Diagnostic
(Routine Oral Exams/X-Rays)
2: Preventative (Cleanings)
3: Restorative (Filings)
4: Endodontics (Root Canal)
5: Periodontics (Gums)
6: Oral Surgery (Wisdom Teeth Extraction)
7: Prosthodontics (Crowns, Bridges, Dentures)
8: Orthodontics (Braces)
9: Pedodontics (Children w/o all perm teeth)
10: Impantology (Impants)
-In addition, typical plan includes provisions for palliative treatment (minimize pain
w/anesthesia), emergency care, consultation
✔✔Identify groupings of the ten dental procedures (Mod 5.1) - ✔✔1: Preventative &
Diagnostic
2: Minor restorative
3: Often combined with (2), includes major restorative work (prosthodontics),
endodontics, periodontics and oral surgery
4: Orthodontic
5: Impantantology (typically excluded)
, -Pedodontic is in first two groupings
✔✔How does scheduled dental plan operate? (Mod 5.2) - ✔✔Pays fixed allowance for
each procedure ($50 for cleaning); may include deductibles (small, maybe lifetime)
-Advantages: Cost Control, Uniform Pay, Ease in understanding, employee relations
-Disadvantages: Levels must examined routinely, plan reimbursement will vary in
different locations according to cost in area, dentists may increase cost if scheduled
benefits are set near maximum of reasonable.
✔✔How does non-scheduled dental plan operate? (Mod 5.2) - ✔✔Most common, cover
percentage of usual (reasonable) charges in the community. Set between 75%-90%,
trend towards lower number. Typically include deductible during a plan year, reimburse
at different levels - preventative/diagnostic at 100%, then scaled down based on plan for
others.
-Advantage: Uniform percentage of total cost; built-in adjustment for inflation
-Disadvantage: Cost control, opportunities for modest benefit improvements limited,
rarely clear in advance what payment of service is.
✔✔Define a combination dental plan (Mod 5.2) - ✔✔Certain procedures on a scheduled
basis while some are on a non-scheduled basis.
✔✔Define an incentive dental plan (Mod 5.2) - ✔✔Program that incentivizes sound
dental hygiene through increasing reimbursement levels - only applies to preventative
and maintenance. When deductibles apply, only on lifetime basis.
✔✔Describe orthodontics plan benefits (Mod 5.3) - ✔✔Never written standalone.
Properly treated, unlikely to reoccur, so written with lifetime maximums. No deductible -
little consequence. Common coinsurance level is 50% - likely to be same level as major
restorative. Paid in installments.
✔✔Identify 3 factors that affect cost of dental plan and issues to be addressed in design
(Mod 5.4) - ✔✔Plan design, characteristics of covered group, employer's approach to
implementation
At design = type of plan, deductibles, max benefit, coinsurance, pre-x, ortho
✔✔What are advantages/disadvantages to lifetime deductibles in dental care (Mod 5.4)
- ✔✔Advantages: Avoiding the cost to the plan of accumulated dental neglect; must
invest in own dental health as a condition of adequate coverage
Disadvantages: Promotes early overutilization; once satisfied, no further value;
introduces employee turnover as cost consideration; may result in adverse reaction if
costs/premiums rise
