- (Topic 3)
Utilization review offers health plans a means of managing costs by managing

1. A. Cost effectiveness of healthcare services.
2. B. Cost of paying healthcare benefits.
3. C. Both of the above

Correct Answer: C

- (Topic 3)
The following statements are about the make-up and function of an HMO's board of
directors.
Select the answer choice that contains the correct statement.

1. A. The make-up of an HMO's board of directors is prescribed by state regulations and does not vary according to whether the plan is a for-profit or not-for-profit plan.
2. B. The board of directors of a not-for-profit HMO is exempt from liability for its actions.
3. C. An HMO's board of directors is not responsible for supervising the performance of its officers and outside advisors.
4. D. A primary function of the board of directors is to approve and evaluate the organization's operational policies and procedures.

Correct Answer: D

- (Topic 2)
Janet Riva is covered by a indemnity health insurance plan that specifies a $250 deductible and includes a 20% coinsurance provision. When Ms. Riva was hospitalized, she incurred
$2,500 in medical expenses that were covered by her health plan. She incurred

1. A. $1,750
2. B. $1,800
3. C. $2,000
4. D. $2,250

Correct Answer: B

- (Topic 3)
The Polestar Company's sole business is the ownership of Polaris Medical Group, a health plan and subsidiary of Polestar. Some members of Polestar's board of directors hold positions with Polestar in addition to their positions on the board; the rest are professionals in academia and businesspeople who do not work for Polestar. Dr. Carolyn Porter, a university president, is on Polestar's board. From the following answer choices, select the response containing the term that correctly identifies Polestar's relationship to Polaris and the term that describes the type of board member represented by Dr. Porter

1. A. Polestar's relationship to Polaris: partnership: Type of board member: operations director
2. B. Polestar's relationship to Polaris: partnership: Type of board member: outside director
3. C. Polestar's relationship to Polaris: holding company: Type of board member: operations director
4. D. Poles tar's relationship to Polaris: holding company: Type of board member: outside director

Correct Answer: D

- (Topic 1)
In assessing the potential degree of risk represented by a proposed insured, a health underwriter considers the factor of anti selection. Anti selection can correctly be defined as the

1. A. inability of a proposed insured to share with the insurer the financial risks of healthcare coverage
2. B. possibility that a proposed insured will profit from an illness by receiving benefits that exceed the total amount of his or her eligible medical expenses
3. C. inability of a proposed insured to provide sufficient evidence that proves he or she is an insurable risk
4. D. tendency of people who have a greater-than-average likelihood of loss to apply for or continue insurance protection to a greater extent than people who have an average or less than average likelihood of the same loss

Correct Answer: D