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Free AHM-520 Exam Braindumps (page: 19)

Page 18 of 55
PDF with 215 Questions

The Lighthouse health plan operates in a state that allows the health plan to use an underwriting method of determining a group's premium in which underwriters treat several small groups as one large group for risk assessment purposes. This method, which helps Lighthouse more accurately estimate a small group's probable claims costs, is known as

  1. Case stripping
  2. The low-option rating method
  3. The rate spread method
  4. Pooling

Answer(s): D



The following statements are about a health plan's underwriting of small groups. Select the answer choice containing the correct statement.

  1. Almost all states prohibit health plan s from rejecting a small group because of the nature of the business in which the small business is engaged.
  2. Most states prohibit health plans from setting participation levels as a requirement for coverage, even when coverage is otherwise guaranteed issue.
  3. In underwriting small groups, a health plan's underwriters typically consider both the characteristics of the group members and of the employer.
  4. Generally, a health plan's underwriters require small employers to contribute at least 80% of the cost of the healthcare coverage.

Answer(s): C



The following statement(s) can correctly be made about a health plan's underwriting of small groups:

A) Typically, a health plan medically underwrites both the employees of a small group and their dependents, even though small group reform laws prohibit health plans from singling out individuals for rejection or substandard rate-ups.
B) In the absence of laws mandating otherwise, a health plan's underwriting standards grow stricter as group size gets smaller.

  1. Both A and B
  2. A only
  3. B only
  4. Neither A nor B

Answer(s): A



State A, which requires guaranteed issue of at least two mandated healthcare plans, has established a typical health coverage reinsurance program for small employer groups. One true statement about this reinsurance program is that it most likely

  1. is administered by a commercial reinsurance company that operates in State A
  2. allows a small employer carrier operating in State A to reinsure either an entire small group or specific individuals within the group
  3. has, for the coverage on a plan, a base premium, which is multiplied by a factor of 2 in the case of reinsurance on entire groups or a factor of 3 for reinsurance on individuals
  4. prohibits a small employer carrier operating in State A from placing individuals enrolled in small groups in a reinsurance pool

Answer(s): B






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