CDHP: Healthcare Insurance Types and Risk
Management Study Questions with Verified
Correct Answers
What makes the healthcare market unique?
Inelastic demand; universal demand; unpredictability of illness; healthcare as a right; supplier-
induced demand; third-party insurance and patient-induced demand.
What are the two types of risk?
Pure risk and speculative risk.
What type of risk does insurance help reduce?
Pure risk.
What is community rating?
Premiums are based on healthcare utilization and cost projections for an entire community.
What is experience rating?
Premiums are based on anticipated use and costs for specified groups rather than the entire
community.
What is adverse selection?
Buying insurance just before loss.
How is adverse selection addressed?
Group policies; elimination/exclusion periods; coverage limitations.
How is moral hazard addressed?
Cost sharing through deductibles, coinsurance, and copays.
What is indemnity insurance?
The subscriber/patient is reimbursed for a portion of medical expenses.
Management Study Questions with Verified
Correct Answers
What makes the healthcare market unique?
Inelastic demand; universal demand; unpredictability of illness; healthcare as a right; supplier-
induced demand; third-party insurance and patient-induced demand.
What are the two types of risk?
Pure risk and speculative risk.
What type of risk does insurance help reduce?
Pure risk.
What is community rating?
Premiums are based on healthcare utilization and cost projections for an entire community.
What is experience rating?
Premiums are based on anticipated use and costs for specified groups rather than the entire
community.
What is adverse selection?
Buying insurance just before loss.
How is adverse selection addressed?
Group policies; elimination/exclusion periods; coverage limitations.
How is moral hazard addressed?
Cost sharing through deductibles, coinsurance, and copays.
What is indemnity insurance?
The subscriber/patient is reimbursed for a portion of medical expenses.
