Risk Management & Mitigation Flashcards
7 cards from real ACA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Management & Mitigation flashcards as text
Under the ACA's risk adjustment program, which entity collects and distributes payments among insurers in the individual and small group markets?
Answer: CMS on behalf of each state
CMS operates the permanent risk adjustment program and transfers funds from lower-risk to higher-risk plans in the individual and small group markets.
An insurer's risk adjustment transfer amount is calculated based on the difference between its average actuarial risk and:
Answer: The state average actuarial risk
Risk adjustment transfers compare each plan's average actuarial risk against the statewide average to determine whether a plan pays into or receives from the pool.
Which ACA provision was designed specifically to protect insurers from unexpectedly high claims in the first years of marketplace operation through a shared losses mechanism?
Answer: Risk Corridors
Risk corridors limited insurer losses by requiring HHS to cover a portion of losses exceeding a set threshold and collecting gains above another threshold.
A health plan with a risk score BELOW the market average under the ACA risk adjustment program will most likely:
Answer: Pay into the risk adjustment pool
Plans with below-average risk scores (healthier enrollees) pay transfers to compensate plans with higher-risk enrollees.
Under the ACA's temporary reinsurance program (2014–2016), which enrollees' claims primarily triggered reinsurance payments to insurers?
Answer: High-cost enrollees whose claims exceeded the attachment point
Reinsurance payments were triggered when an individual's claims exceeded a set attachment point, helping plans cover catastrophic costs.
Which risk mitigation strategy do ACA-compliant plans use to protect against adverse selection from enrollees gaming open enrollment?
Answer: Special Enrollment Period eligibility verification
ACA marketplaces verify qualifying life events for Special Enrollment Periods to prevent individuals from enrolling only when they need care.
Under the ACA, an insurer that fails to meet the 80% MLR threshold in the individual market must:
Answer: Pay rebates to policyholders
Insurers spending less than 80% of premiums on medical care and quality improvement must rebate the difference to individual market policyholders.