AHIP (Health Plan Finance and Risk Management) 5

Question 1

A health plan is evaluating a prospective provider network contract. Which financial metric most directly measures whether contracted rates will generate positive margin?

Accepted Answer

Cost per member per month (PMPM) relative to premium PMPM

Answer

Comparing medical cost PMPM (driven by contracted rates and utilization) to premium PMPM directly shows whether the plan will earn a positive margin on that block of business.

Question 2

A health plan that enrolls a disproportionate share of high-cost, chronically ill members relative to its premium revenue is experiencing:

Accepted Answer

Adverse selection

Answer

Adverse selection occurs when a plan's enrolled population has higher-than-average health risk, leading to higher claims costs than the premium base supports.

Question 3

Under the ACA's minimum value (MV) standard, employer-sponsored health plans must cover at least what percentage of the total allowed costs of benefits?

Accepted Answer

60%

Answer

ACA minimum value requires employer plans to cover at least 60% of expected total costs, equivalent to a bronze-level plan on the marketplace.

Question 4

Which of the following best describes 'capitation' as a provider payment method?

Accepted Answer

Providers receive a fixed monthly payment per enrolled member regardless of services used

Answer

Capitation pays providers a fixed per-member per-month (PMPM) amount in advance, transferring utilization risk from the payer to the provider.

Question 5

A health plan's 'claims lag triangle' is used primarily to:

Accepted Answer

Analyze historical claim payment patterns to project IBNR liabilities

Answer

A claims lag triangle arranges historical paid claims data by incurral period and payment period, enabling actuaries to identify patterns and project unpaid claim liabilities.

AHIP - America's Health Insurance Plans Practice Test

AHIP - America's Health Insurance Plans Practice Test

AHIP (Health Plan Finance and Risk Management) 5