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Free AHM-520 Exam Braindumps (page: 16)

Page 15 of 55
PDF with 215 Questions

The Violin Company offers its employees a triple option of health plans: an HMO, an HMO with a point of service (POS) option, and an indemnity plan.

Premiums are lowest for the HMO option and highest for the indemnity plan. Violin employees who anticipate that they will be individual low utilizes of healthcare services are most likely to enroll in the

  1. HMO and are least likely to enroll in the HMO with the POS option
  2. HMO and are least likely to enroll in the indemnity plan
  3. Indemnity plan and are least likely to enroll in the HMO
  4. Indemnity plan and are least likely to enroll in the HMO with the POS option

Answer(s): B



The following statements illustrate the use of different rating methods by health plans:
The Dover health plan established rates for small groups by using a rating method which requires that the average premium in each group cannot be more than 120% of the average premium for any other group. Under this method, all members of each group pay the same premium, which is based on the experience of the group.
Under the rating method used by the Rolling Hills health plan, the health plan calculates the ratio of a group's experience to the group's historical manual rate. Rolling Hills then multiplies this ratio by the group's future manual rate. Rolling Hills cannot consider the group's experience in determining premium rates.

From the following answer choices, select the response that correctly indicates the rating methods used by Dover and Rolling Hills.

  1. Dover = modified community rating
    Rolling Hills = factored rating
  2. Dover = modified community rating
    Rolling Hills = adjusted community rating (ACR)
  3. Dover = community rating by class (CRC)
    Rolling Hills = factored rating
  4. Dover = community rating by class (CRC)
    Rolling Hills = adjusted community rating (ACR)

Answer(s): D



Experience rating and manual rating are two rating methods that the Cheshire health plan uses to determine its premium rates. One difference between these two methods is that, under experience rating, Cheshire

  1. Uses a purchaser's actual experience to estimate the group's expected experience, whereas, under manual rating, Cheshire uses its own average experience--and sometimes the experience of other plans--to estimate the group's expected experience
  2. can establish rates for groups that have no previous plan experience, whereas, under manual rating, Cheshire cannot establish rates for groups with no previous plan experience
  3. charges each group in the same class the same premium whereas, under manual rating, Cheshire charges lower premiums to groups that have experienced lower utilization rates
  4. can use group demographics to help determine the rate for a block of business, whereas, under manual rating, Cheshire cannot use group demographics when determining the rate for a block of business

Answer(s): A



Experience rating methods can be either prospective or retrospective. With regard to these types of experience rating methods, it can correctly be stated that

  1. A health plan typically can expect much higher profit levels from using retrospective experience rating rather than prospective experience rating a health plan using prospective experience rating is more likely than a
  2. Health plan using retrospective experience rating to have to pay an experience rating dividend if a group's experience has been better than expected during the rating period
  3. The premium determined under retrospective experience rating is usually higher than the premium under prospective experience rating
  4. Most states require HMOs to use retrospective experience rating rather than prospective experience rating

Answer(s): C






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