AHIP Medicare Certification Exam — Questions and Answers

Question 1: What is the maximum out-of-pocket (MOOP) limit for Medicare Advantage plans?

CMS sets an annual limit that plans cannot exceed (Correct answer)
There is no federal limit
Plans may set any limit approved by their state insurance commissioner
The MOOP matches the Original Medicare deductible

Correct answer: CMS sets an annual limit that plans cannot exceed

CMS establishes an annual MOOP limit for Medicare Advantage plans; individual plans may set lower limits but cannot exceed the CMS cap.

Question 2: A person under 65 may qualify for Medicare if they have received Social Security Disability Insurance (SSDI) for how long?

12 months
6 months
24 months (Correct answer)
36 months

Correct answer: 24 months

Individuals under 65 who have received SSDI for 24 months automatically become eligible for Medicare.

Question 3: An agent receives a referral lead from a friend who is a doctor. Under the Anti-Kickback Statute, what must the agent be careful about?

Verifying the beneficiary's Medicare number before meeting
Avoiding providing any compensation or anything of value to the doctor for the referral (Correct answer)
Filing the referral with CMS within 48 hours
Obtaining written consent from the beneficiary before the appointment

Correct answer: Avoiding providing any compensation or anything of value to the doctor for the referral

Providing compensation or anything of value to a physician in exchange for Medicare referrals could violate the Anti-Kickback Statute.

Question 4: When a beneficiary is enrolled in a Medicare plan, the agent must provide them with:

Only the Summary of Benefits
A verbal summary of the plan; written materials are optional
The Evidence of Coverage (EOC), Summary of Benefits, and Annual Notice of Change (if applicable) (Correct answer)
The Annual Notice of Change only

Correct answer: The Evidence of Coverage (EOC), Summary of Benefits, and Annual Notice of Change (if applicable)

Plans are required to provide enrollees with key documents including the Evidence of Coverage (EOC), Summary of Benefits, and the Annual Notice of Change.

Question 5: What is the standard enrollment period for Medicare when a person turns 65?

12-month open enrollment
7-month Initial Enrollment Period (Correct answer)
3-month window before and after birthday
1-month window on birthday

Correct answer: 7-month Initial Enrollment Period

The Initial Enrollment Period (IEP) is a 7-month window: 3 months before, the month of, and 3 months after the 65th birthday.

Question 6: What is the Medicare Advantage Open Enrollment Period (MA OEP)?

April 1 – June 30
October 15 – December 7
July 1 – September 30
January 1 – March 31 (Correct answer)

Correct answer: January 1 – March 31

The MA OEP runs January 1–March 31, allowing current MA enrollees to switch plans or return to Original Medicare once.

Question 7: Preferred pharmacy networks in Part D are designed to:

Offer lower cost-sharing when members use designated pharmacies (Correct answer)
Apply only to specialty drug tiers
Replace mail-order pharmacy options
Limit enrollees to a single pharmacy chain

Correct answer: Offer lower cost-sharing when members use designated pharmacies

Preferred pharmacy networks give beneficiaries lower cost-sharing at select pharmacies, incentivizing use of cost-efficient pharmacy partners.

Question 8: An agent must retain the Scope of Appointment (SOA) form for a minimum of:

3 years
6 months
10 years (Correct answer)
1 year

Correct answer: 10 years

CMS requires that SOA forms be retained for a minimum of 10 years.

Question 9: Under Medicare, how many days does a beneficiary have coinsurance responsibility in a skilled nursing facility (SNF) after the initial covered days?

All days require coinsurance
Days 1–10 are free; days 11–60 require coinsurance
Days 1–20 are free; days 21–100 require coinsurance (Correct answer)
Only days after 100 require payment

Correct answer: Days 1–20 are free; days 21–100 require coinsurance

Medicare covers SNF days 1–20 at 100%; days 21–100 require a daily coinsurance payment; after 100 days, Medicare pays nothing.

Question 10: Risk adjustment in Medicare Advantage is used to:

Penalize plans with unhealthy members
Set uniform premiums across all plans
Adjust payments based on enrollees' health status and diagnoses (Correct answer)
Limit enrollment to healthy beneficiaries

Correct answer: Adjust payments based on enrollees' health status and diagnoses

Risk adjustment ensures MA plans receive higher payments for sicker enrollees, compensating for higher expected costs.

Question 11: What is the 'national base beneficiary premium' for Part D?

A benchmark CMS calculates annually used to determine premium subsidies and late penalties (Correct answer)
The minimum premium all plans must charge
The Medicaid contribution to Part D costs
The maximum premium any plan can charge

Correct answer: A benchmark CMS calculates annually used to determine premium subsidies and late penalties

CMS calculates the national base beneficiary premium annually; it is used as the basis for computing the Part D late enrollment penalty and LIS subsidy amounts.

Question 12: Which type of Medicare Advantage plan typically requires members to use a specific network of providers and get referrals?

HMO (Correct answer)
PPO
PFFS
SNP

Correct answer: HMO

HMO (Health Maintenance Organization) plans generally require members to use network providers and obtain referrals for specialist care.

Question 13: Under HIPAA, individually identifiable health information (PHI) may NOT be disclosed without patient authorization EXCEPT:

To family members without the patient's knowledge
For treatment, payment, or healthcare operations (Correct answer)
To employers for productivity monitoring
When requested by a marketing company

Correct answer: For treatment, payment, or healthcare operations

HIPAA permits disclosure of PHI without authorization for treatment, payment, and healthcare operations (TPO).

Question 14: Medicare Advantage plans are required to provide an Annual Notice of Change (ANOC) to enrollees by:

September 30 (Correct answer)
October 1
November 15
December 31

Correct answer: September 30

Plans must mail the ANOC to enrollees by September 30, before the Annual Enrollment Period begins on October 15.

Question 15: What is the primary purpose of an IBNR (Incurred But Not Reported) reserve?

To account for claims that have occurred but have not yet been submitted to the plan (Correct answer)
To cover the cost of reinsurance premiums
To set aside funds for anticipated premium deficiencies
To fund future administrative expenses

Correct answer: To account for claims that have occurred but have not yet been submitted to the plan

IBNR reserves represent an estimate of claims that members have already incurred but providers have not yet billed to the health plan.

Question 16: A 'Medication Therapy Management' (MTM) program in Part D is designed to:

Reduce plan premiums for healthy members
Replace physician prescribing authority
Limit the number of prescriptions a member can fill per month
Help beneficiaries with complex drug regimens use medications safely and effectively (Correct answer)

Correct answer: Help beneficiaries with complex drug regimens use medications safely and effectively

MTM programs are designed to improve outcomes for beneficiaries with multiple chronic conditions and complex medication regimens.

Question 17: The health care plan for its employees is self-funded by the Kayak Company. This plan is an illustration of a general asset plan, a subtype of self-funded plan. This strategy is entirely self-funded, which suggests that

The plan has no funding vehicle
The plan most likely is exempt from ERISA requirements concerning the limits on benefit discrimination for classes of employees
Kayak passes to its employees the financial risk of providing healthcare coverage
The plan is exempt from the state laws and regulations that apply to health insurance policies (Correct answer)

Correct answer: The plan is exempt from the state laws and regulations that apply to health insurance policies

Self-funded health plans, like Kayak Company's, are typically governed by the Employee Retirement Income Security Act (ERISA). A key feature of ERISA is its preemption clause, which exempts self-funded plans from state laws and regulations that apply to traditional health insurance policies. This means states cannot mandate specific benefits or solvency requirements for these plans, providing employers with greater flexibility in plan design.

Question 18: What is a formulary in a Medicare Part D plan?

The plan's annual deductible schedule
A cost-sharing tier for generic drugs only
A list of covered prescription drugs (Correct answer)
The network of participating pharmacies

Correct answer: A list of covered prescription drugs

A formulary is the list of prescription drugs covered by a Part D plan, typically organized into cost-sharing tiers.

Question 19: A Medicare Advantage PFFS (Private Fee-for-Service) plan is characterized by:

Requiring enrollment in a Part D drug plan
Coverage only for preventive services
Strict network requirements and mandatory referrals
Setting its own payment rates; any provider who accepts the terms can treat the member (Correct answer)

Correct answer: Setting its own payment rates; any provider who accepts the terms can treat the member

PFFS plans set their own reimbursement rates and terms; any Medicare-participating provider who accepts those terms may provide care.

Question 20: What is 'catastrophic coverage' in Medicare Part D?

Coverage for catastrophic medical events like strokes
Coverage that begins after very high out-of-pocket drug costs are met (Correct answer)
Emergency hospital coverage under Part D
Coverage for experimental cancer treatments

Correct answer: Coverage that begins after very high out-of-pocket drug costs are met

Catastrophic coverage kicks in after a beneficiary's out-of-pocket drug spending reaches the catastrophic threshold, significantly reducing their cost-sharing.

Question 21: Medicare Advantage (Part C) plans are required to cover at minimum:

Part A benefits only
Part A, B, and D benefits combined
All benefits covered under Original Medicare (Parts A and B) (Correct answer)
Part B benefits only

Correct answer: All benefits covered under Original Medicare (Parts A and B)

Medicare Advantage plans must cover all services covered under Original Medicare Parts A and B.

Question 22: Under CMS rules, agents selling Medicare plans are required to complete training and certification:

Once, at initial licensure
Every three years per CMS requirements
Only when a compliance complaint is filed against them
Annually for each carrier whose products they sell (Correct answer)

Correct answer: Annually for each carrier whose products they sell

CMS requires agents to complete annual training and pass certification tests for each plan sponsor (carrier) whose Medicare products they sell.

Question 23: When calculating an ACA marketplace subsidy (Premium Tax Credit), which income benchmark is used?

Net income after all deductions
Modified Adjusted Gross Income (MAGI) (Correct answer)
Adjusted Gross Income (AGI)
Gross income

Correct answer: Modified Adjusted Gross Income (MAGI)

The Premium Tax Credit is based on MAGI, which includes AGI plus certain non-taxable income such as Social Security benefits.

Question 24: Medigap (Medicare Supplement Insurance) policies can be sold to cover gaps in:

Both Original Medicare and Medicare Advantage
Original Medicare (Parts A and B) only (Correct answer)
Medicare Part D only
Medicare Advantage plans

Correct answer: Original Medicare (Parts A and B) only

Medigap policies are designed to cover cost-sharing gaps in Original Medicare (Parts A and B) and cannot be used with Medicare Advantage.

Question 25: ALS (Lou Gehrig's disease) qualifies a person for Medicare:

After 24 months of SSDI
After 12 months of SSDI
Immediately upon receiving SSDI (Correct answer)
Only after age 65

Correct answer: Immediately upon receiving SSDI

Individuals diagnosed with ALS qualify for Medicare immediately upon receipt of SSDI benefits, with no waiting period.

Question 26: In Medicare Part D, 'quantity limits' are a utilization management tool that:

Cap the number of prescriptions per month regardless of drug type
Limit the total annual drug spend to a set dollar amount
Apply only to Schedule II controlled substances
Restrict the amount of a drug dispensed per fill or time period based on clinical guidelines (Correct answer)

Correct answer: Restrict the amount of a drug dispensed per fill or time period based on clinical guidelines

Quantity limits restrict how much of a drug can be dispensed at one time or over a period, based on safety guidelines or approved dosing.

Question 27: Which star rating system does CMS use to evaluate Medicare Advantage plan quality?

Tier 1–4 ranking
1–5 star scale (Correct answer)
A–F letter grades
Bronze/Silver/Gold tiers

Correct answer: 1–5 star scale

CMS rates MA plans on a 1 to 5 star scale, where 5 stars represents the highest quality.

Question 28: Which Medicare part is often called 'Original Medicare'?

Part A alone
Part C and Part D combined
Part A and Part B combined (Correct answer)
Part B alone

Correct answer: Part A and Part B combined

Original Medicare refers to the combination of Part A (hospital) and Part B (medical) coverage administered by the federal government.

Question 29: Under which circumstance can a Part D plan change its formulary mid-year?

Only when a drug manufacturer raises the price
Plans can never change the formulary mid-year
Only if CMS approves the change and enrollees are given proper notice (Correct answer)
Anytime the plan chooses without restriction

Correct answer: Only if CMS approves the change and enrollees are given proper notice

Plans may make certain mid-year formulary changes but must obtain CMS approval and provide enrollees adequate advance notice.

Question 30: What is 'step therapy' in a Medicare Part D plan?

Tiered cost-sharing based on pharmacy type
A multi-step enrollment process
A graduated deductible that decreases over time
A requirement to try lower-cost drugs before a plan covers a preferred drug (Correct answer)

Correct answer: A requirement to try lower-cost drugs before a plan covers a preferred drug

Step therapy requires beneficiaries to try one or more alternative (usually less expensive) drugs before the plan will cover the originally prescribed medication.

Question 31: Which of the following describes a key feature of a Medicare Medical Savings Account (MSA) plan?

MSA plans include Part D drug coverage automatically
The government deposits money into a bank account that can be used for Medicare-covered expenses (Correct answer)
The plan deposits money into an HSA that members can use for medical expenses
Members contribute pre-tax dollars monthly to a savings account paired with low deductibles

Correct answer: The government deposits money into a bank account that can be used for Medicare-covered expenses

Medicare MSA plans combine a high-deductible MA plan with a savings account funded by CMS deposits to help pay for medical expenses.

Question 32: What is a 'creditable coverage' in the context of Medicare Part D?

Drug coverage at least as good as Medicare's standard benefit (Correct answer)
Any government-sponsored health plan
Coverage from an employer that meets ACA standards
Coverage with a lower premium than Medicare

Correct answer: Drug coverage at least as good as Medicare's standard benefit

Creditable coverage for Part D means the drug coverage is expected to pay at least as much as Medicare's standard prescription drug benefit.

Question 33: What is the 'cooling-off period' related to Medicare marketing?

The period between AEP close and coverage effective date
The 48-hour period after a sales event during which the agent cannot call the beneficiary back (Correct answer)
A 60-day window for rescinding a prior authorization denial
A 30-day period after enrollment during which the plan cannot charge a premium

Correct answer: The 48-hour period after a sales event during which the agent cannot call the beneficiary back

After a marketing/sales event, agents must wait 48 hours before following up with a beneficiary who attended, to avoid high-pressure tactics.

Question 34: Under CMS marketing guidelines, when can an agent conduct a marketing/sales event at a healthcare facility such as a hospital or skilled nursing facility?

Anytime with facility management permission
Only in common areas with prior facility consent and CMS-approved materials
Never — CMS prohibits marketing events at healthcare facilities (Correct answer)
Only for current plan members during annual renewal

Correct answer: Never — CMS prohibits marketing events at healthcare facilities

CMS prohibits marketing and sales activities at healthcare facilities such as hospitals, physician offices, and skilled nursing facilities because beneficiaries in these settings are considered vulnerable.

Question 35: Which of the following financial statements provides a snapshot of a health plan's assets, liabilities, and net worth at a specific point in time?

Statement of cash flows
Statement of changes in equity
Balance sheet (Correct answer)
Income statement

Correct answer: Balance sheet

The balance sheet (statement of financial position) shows a plan's assets, liabilities, and net worth at a single date.

Question 36: Which of the following is an example of a 'prospective' payment methodology?

Retrospective cost settlements at year-end
Fee-for-service reimbursement after services are rendered
Payment set in advance per diagnosis-related group (DRG) regardless of actual costs (Correct answer)
Cost-plus reimbursement based on actual hospital expenditures

Correct answer: Payment set in advance per diagnosis-related group (DRG) regardless of actual costs

Prospective payment, such as DRG-based hospital payment, sets rates in advance, creating incentives for efficiency since the provider bears the risk of excess costs.

Question 37: The Annual Enrollment Period (AEP) for Medicare runs from:

January 1 – March 31
July 1 – September 30
October 15 – December 7 (Correct answer)
November 1 – January 31

Correct answer: October 15 – December 7

The Annual Enrollment Period (AEP) runs October 15 through December 7, with coverage changes effective January 1.

Question 38: A health plan's 'operating margin' is best defined as:

Total revenue minus total claims paid
Net income divided by total assets
Operating income divided by total revenue (Correct answer)
Medical costs divided by earned premiums

Correct answer: Operating income divided by total revenue

Operating margin equals operating income (revenue minus operating expenses) divided by total revenue, measuring profitability from core operations.

Question 39: A Medicare Advantage PPO plan differs from an HMO primarily because:

PPOs do not cover Part B services
PPOs allow members to see out-of-network providers, usually at a higher cost (Correct answer)
PPOs only operate in rural areas
PPOs require referrals for all specialist visits

Correct answer: PPOs allow members to see out-of-network providers, usually at a higher cost

PPO plans offer more flexibility by allowing out-of-network care, typically with higher cost-sharing than in-network visits.

Question 40: An agent who sells Medicare Advantage or Part D plans must be licensed in the state where the beneficiary:

Receives medical care
Works
Resides (Correct answer)
Was born

Correct answer: Resides

Agents must hold a valid health insurance license in the state where the beneficiary resides in order to sell Medicare plans in that state.

Question 41: What is the 'transition fill' policy in Medicare Part D?

A temporary supply of a drug provided when a new enrollee's drug is not on the plan's formulary (Correct answer)
A subsidy for insulin costs during transitions
A free 90-day supply given at enrollment
A policy allowing beneficiaries to transfer to any pharmacy

Correct answer: A temporary supply of a drug provided when a new enrollee's drug is not on the plan's formulary

Transition fills provide new enrollees a temporary supply of a non-formulary drug while they work with their doctor to find an alternative or request an exception.

Question 42: Which of the following is a beneficiary's right when a Part D plan denies coverage of a drug?

Request an exception or file an appeal (Correct answer)
Only request a formulary change at the next plan year
Switch pharmacies to override the denial
No recourse; plan decisions are final

Correct answer: Request an exception or file an appeal

Beneficiaries have the right to request a formulary exception or appeal a coverage determination if a drug is denied.

Question 43: A health plan discovers its medical cost trend is running 4 percentage points above what was assumed in its current year's premium rates. The most likely immediate financial impact is:

An increase in the plan's risk-based capital ratio
An improvement in the plan's MLR, increasing rebate obligations
Erosion of the plan's operating margin and potential underwriting loss (Correct answer)
Reduction in the plan's IBNR reserve requirements

Correct answer: Erosion of the plan's operating margin and potential underwriting loss

When actual medical trend exceeds the trend assumed in premium rates, claims costs rise faster than revenue, compressing or eliminating operating margin.

Question 44: Which of the following is a permissible activity for an agent when conducting a community education event?

Asking attendees to provide their Medicare numbers for a plan comparison
Distributing enrollment applications and accepting completed forms
Conducting one-on-one sales presentations during the event
Providing objective educational information about Medicare without promoting a specific plan (Correct answer)

Correct answer: Providing objective educational information about Medicare without promoting a specific plan

Community education events are intended for objective Medicare education; agents may not conduct sales activities, distribute enrollment forms, or promote specific plans at these events.

Question 45: Which Medicare enrollment period allows people who missed their IEP to sign up for Part B?

Open Enrollment Period
Annual Enrollment Period
Special Enrollment Period
General Enrollment Period (Correct answer)

Correct answer: General Enrollment Period

The General Enrollment Period (January 1 – March 31 each year) allows individuals who missed their IEP to enroll in Part B, with a potential late-enrollment penalty.

Question 46: CMS requires Medicare Advantage and Part D agents to complete FWA training:

Only after a compliance violation
Every three years
Annually as part of certification requirements (Correct answer)
Once at initial certification only

Correct answer: Annually as part of certification requirements

CMS requires agents selling MA and Part D plans to complete annual FWA training as part of their certification requirements.

Question 47: What is the Medicare Part A hospital deductible applied to?

Each calendar year
Each hospital visit regardless of length
Once per lifetime
Each benefit period (Correct answer)

Correct answer: Each benefit period

The Medicare Part A deductible applies per benefit period, not per year.

Question 48: Which Medicare Advantage plan type serves specific populations such as people with chronic conditions or dual-eligible individuals?

PFFS
SNP (Special Needs Plan) (Correct answer)
PPO
MSA

Correct answer: SNP (Special Needs Plan)

Special Needs Plans (SNPs) are tailored for specific populations including dual-eligible beneficiaries, institutionalized individuals, or those with certain chronic conditions.

Question 49: If a beneficiary requests information about a Medicare plan online or via an enrollment form, an agent may follow up by telephone:

Within 48 hours of receiving a marketing event lead
Within 12 months of the request
Never — telephone follow-up is always prohibited
Immediately, as the request constitutes prior permission (Correct answer)

Correct answer: Immediately, as the request constitutes prior permission

When a beneficiary initiates contact or requests information (such as by submitting an online inquiry), the agent has permission to follow up by telephone.

Question 50: What is the agent's obligation if a beneficiary wants to discuss a product not listed on the Scope of Appointment (SOA)?

Obtain a new SOA for the additional product types before discussing them (Correct answer)
Contact the plan sponsor for verbal permission to expand the discussion
Discuss the additional products but note it on the original SOA
Proceed with discussing all plan types since the beneficiary is present

Correct answer: Obtain a new SOA for the additional product types before discussing them

If a beneficiary wants to discuss products not listed on the original SOA, a new or amended SOA must be completed and signed before those products are discussed.

AHIP Medicare Certification Exam

The AHIP Medicare Certification Exam tests insurance agents on Medicare basics, Medicare Advantage (Part C), Medicare Part D prescription drug coverage, marketing and sales compliance, and enrollment procedures required to sell Medicare plans.

Questions

120 min

Time Limit

90%

To Pass

Checking for saved progress...

Exam Rules

You can skip questions and return to them later
Flag questions for review before submitting
No feedback shown until you submit the entire exam
Unanswered questions count as wrong — answer everything
10 pretest questions are mixed in and don't affect your score
Timer auto-submits when time runs out
Your progress is auto-saved every 30 seconds