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Free AHM-520 Exam Braindumps (page: 20)

Page 19 of 55
PDF with 215 Questions

Kevin Olin applied for individual healthcare coverage from the Mercury health plan. Before issuing the policy, Mercury's underwriters attached a rider that excludes from coverage any loss that results from Mr. Olin's chronic knee problem. This information indicates that Mr. Olin's policy includes

  1. a moral hazard rider
  2. an essential plan rider
  3. an impairment rider
  4. an insurable interest rider

Answer(s): C



The ability of a health plan to effectively perform the rating and underwriting functions has become critical to the plan's success. In developing its pricing strategy, a health plan has to address the marketplace's ongoing trends and factors, which include

  1. a decreased focus on small to mid-size employer groups
  2. an improvement in the financial performance of health plans
  3. a consolidation of the key players in the health plan industry
  4. a decreased complexity of the products being offered.

Answer(s): C



When pricing its product, the Panda Health Plan assumes a 4% interest rate on its investments.
Panda also assumes a crediting interest rate of 4%.

The actual interest rate earned by Panda on the assets supporting its product is 6%. The following statements can correctly be made about the investment margin and interest margin for Panda's products.

  1. Panda most likely built the crediting interest rate of 4% into the investment margin of its product.
  2. Panda's investment margin is the difference between its actual benefit costs and the benefit costs that it assumes in its pricing.
  3. The interest margin for this product is 2%.
  4. All of these statements are correct.

Answer(s): C



An actuary for the Noble Health Plan observed that the plan's actual morbidity was lower than its assumed morbidity and that the plan's actual administrative expenses were higher than its assumed administrative expenses. In this situation, Noble's actual underwriting margin was

  1. larger than its assumed underwriting margin, and the plan's actual expense margin was higher than its assumed expense margin
  2. larger than its assumed underwriting margin, but the plan's actual expense margin was lower than its assumed expense margin
  3. smaller than its assumed underwriting margin, but the plan's actual expense margin was higher than its assumed expense margin
  4. smaller than its assumed underwriting margin, and the plan's actual expense margin was lower than its assumed expense margin

Answer(s): B






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