If an insurer incorrectly estimates an insured person's premium

, then the insurer will suffer a financial loss.

can appeal to the state insurance commissioner for a subsidy.

will drop people whose medical expenses exceed their premium.

None of the above

Medicare Part B (physician and outpatient services) is financed by

a premium that is 75 percent subsidized by the government and 25 percent subsidized by the aged.

a payroll tax on both the employee and the employer.

a premium that is 100 percent subsidized by the government.

both a subsidized premium and a payroll tax

The diagnosis-related group hospital payment system changed hospital incentives by making it more profitable to

employ physicians.

admit sicker Medicare patients.

reduce a patient's length of stay.

charge more for lab tests.

Medicare is difficult to reform because

		pharmaceutical manufacturers benefit from drug sales under Part D.
		senior congressional leaders do not want their Medicare benefits changed.
		the Medicare population is opposed and have high voting-participation rates.
		Medicare reform would likely increase the federal deficit.

Medicare is not considered to be a fair redistributive system because

Medicare beneficiaries receive large subsidies regardless of how high their income is.

low-income Medicare beneficiaries with high out-of-pocket expenses must enroll in Medicaid.

low-income employees subsidize high-income Medicare beneficiaries.

All of the above

Substituting an income-related voucher for the current Medicaid system would not achieve the following:

		An income-related voucher would eliminate the large differences between states in the percentage of their populations eligible for Medicaid.
		An income-related voucher would reinforce the movement toward Medicaid managed care, with its emphasis on coordinated care and incentives to provide care in less costly settings.
		An income-related voucher would provide employees with an incentive to forego higher pay so that they qualify for the voucher subsidy.
		An income-related voucher would provide those on Medicaid with an incentive to take higher-paying jobs because they would only lose part of their voucher subsidy.

Most states have shifted their Medicaid beneficiaries into private Medicaid managed care/HMO plans. What is the advantage to the state for doing so?

		Medicaid patients are more likely to receive coordinated care and preventive services.
		By paying HMOs a fixed fee per person per month, states are able to shift their risk for higher expenditures to a managed care plan.
		Medicaid patients are more likely to have access to a physician within the HMO.
		The HMOs have entered the Medicaid market because they believe they can provide the care less expensively and earn a profit.

What are some legitimate ways to spend down one's assets to qualify for Medicaid?

Fixing up one's house, purchasing a new car, or setting up a special burial account

Providing financial gifts to one's children

Transferring property to one's children

Setting up special retirement accounts that can be passed on to children or relatives after seven years

How is Medicaid administered?

		By each state, but policy is shared with the federal government
		By the federal government and coordinated with the states
		By a joint commission composed of federal and state appointees
		None of the above

Why were hospitals and physicians willing to participate in an HMO's provider network?

Hospitals and physicians developed excess capacity and were willing to discount their prices for more patients.

Hospitals and physicians believed that they could reduce medical costs by joining together to better manage patient care.

Some states provided hospitals and their employed physicians an incentive to join or start HMOs to serve their Medicaid patients.

b and c

How did early managed care firms achieve their largest savings?

		By limiting access to very expensive specialty prescription drugs
		By reducing hospital utilization of its enrollees
		By making enrollees wait long periods to see their primary care physician
		By limiting enrollees' access to the HMO's specialists

Managed care plans differ according to the restrictiveness of their provider network and access to specialists. Which types of plans are likely to have the lowest premiums?

		Plans that have the largest ratio of primary care physicians to specialists
		Plans that have the most experience and have been in existence the longest
		Plans that have the most restrictive/narrow provider network
		Plans that have received the highest quality and outcome measures

QUESTION 20

As part of the Affordable Care Act, health insurance exchanges were established. What have been the most important cost-containment approaches used by health plans competing for insurance exchange enrollees?

		Health plans have used very narrow/limited provider networks.
		Health plans have dramatically reduced access to new medical technology.
		Health plans have included large deductibles and out-of-pocket payments.
		a and c