CEBS GBA 2 LATEST ACTUAL EXAM 2024-2025 QUESTIONS AND DETAILED CORRECT ANSWERS (VERIFIED), Exams of Nursing

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CEBS GBA 2 LATEST ACTUAL EXAM

2024 - 2025 QUESTIONS AND DETAILED

CORRECT ANSWERS (VERIFIED

ANSWERS) | A+ GRADE STUDY GUIDE

Mr. Smith is insured in his company's group life insurance plan. The plan is noncontributory and meets the requirements of Internal Revenue Code Section 79. How much group life insurance can be provided to Mr. Smith without him incurring a federal income tax liability on the value of his employer's contributions? A.) 0 B.) 25, C.) 50, D.) 100, E.) An unlimited amount Correct Answer C.) 50, A medical group is paid fee-for-service up to a withhold amount. The group is paid 75 percent at the time of service and the remaining 25 percent is paid if the managed care plan: A.) Is able to cover its overall claim costs.

B.) Covers the physician salaries. C.) Anticipates providing less than two percent of out-of- network benefits in the next computation period. D.) Provides virtually 100% in-network benefits in the computation period. E.) Is efficient at recapturing capitation fees for late subscriber terminations. Correct Answer A.) Is able to cover its overall claim costs. The health insurance rating system in which insurers place policyholders into groups according to their loss producing characteristics is known as: A.) Calibrated rating B.) Manual rating C.) Durational rating D.) General liability rating E.) Objective rating Correct Answer B.) Manual rating Developed countries other than the U.S. spend a much lower proportion of their gross domestic product on health care and enjoy better quality than the U.S. does. It is widely believed by policy makers that one major reason for this phenomenon is because: A.) The medical educational programs are better in the other countries.

B.) The health care systems in such countries are built on a strong primary care base. C.) Other countries use much better technology than the U.S. does. D.) The U.S. has not made quality healthcare a high priority. E.) Other countries have healthier populations. Correct Answer B.) The health care systems in such countries are built on a strong primary care base. The Affordable Care Act included several risk and market stabilization programs. Which of the following is one of the programs that dealt with limiting insurer losses and gains beyond an allowable range? A.) Reinsurance program B.) Risk adjustment program C.) Medical loss ratio program D.) Risk corridor program E.) Bidding process program for qualified health plans Correct Answer D.) Risk corridor program Which of the following is the approximate percentage of the U.S. population covered in the specified U.S. healthcare scheme? A.) 40% through private individual insurance B.) 25% through employer-sponsored group insurance C.) 25% through the Medicaid program D.) 20% through the Federal Employees Health Benefits (FEHB) program

E.) 15% through the Medicare program Correct Answer E.) 15% through the Medicare program Which of the following statements regarding health insurance rating systems is (are) correct? I. Both prospective and retrospective experience rating use an employer's experience to calculate the insurance rate. II. With prospective rating, the insured, not the insurer, bears the underwriting risk. III. If experience in the year 20X1 is used to determine the rate for the subsequent year, 20X2, this would be retrospective rating. Correct Answer A.) I only Which of the following statements regarding the loading percentage for health insurance rates is (are) correct? I. The loading percentage is lower for group health insurance rates than it is for individual health insurance rates. II. The loading percentage is lower for small groups than for large groups. III. The Affordable Care Act imposes penalties on insurers if their loading fees are too high. Correct Answer D.) I and III only Which of the following statements regarding low-cost, retail health care clinics is (are) correct? I. While low-cost, retail health clinics offered the promise of lowering the cost of health care, actual experience has been negative and the number of these clinics has been declining.

II. This approach requires the onsite, day-to-day management of a physician. III. These clinics can offer a range of medical services from basic triage and prevention to management of chronic conditions like diabetes and heart disease. Correct Answer B.) III only Which of the following statements regarding self-insured health plans is (are) correct? I. Self-insured health plans want to be exempt from state insurance regulation. II. Relatively few, less than 20 percent, of workers are in some type of self-insured preferred provider organization (PPO) health plans. III. A third-party administrator (TPA) may be used when an employer wants to have a self-insured plan but does not want the burden of administering the plan. Correct Answer C.) I and III only Which of the following statements regarding the size of price concessions managed care plans can negotiate with hospitals is (are) correct? I. Virtually no managed care plans pay full billed II. Discounts rarely exceed 40 percent. III. There apparently is no direct relationship between the size of the discount and the actual price of hospital services. Correct Answer C.) I and III only Studies regarding hospital price negotiations in selective contracting include which of the following implications?

I. Insurers and consumers generally should encourage the entry of new and additional capacity in the local health care market if the purpose is to reduce prices. II. The existence of numerous self-employed pediatricians is likely to hinder selective contracting efforts. III. If a local hospital market has idle capacity, it is likely that neighboring hospitals will tend to have healthy financial results. Correct Answer A.) I only Which of the following are key assumptions that were proven to be incorrect for long-term care (LTC) policies sold from when first introduced in the 1980s to the 1990s? I. Morbidity experience was higher than expected II. Lapse rates turned out to be higher than expected III. Higher-than-expected margins were needed to account for adverse selection Correct Answer C.) I and III only Which of the following is (are) recommendations that have been made to address certain issues including adverse selection related to Small Business Health Options Program (SHOP) exchanges? I. The premium subsidies that have been made available to firms that purchase SHOP plans should be increased. II. SHOP exchanges should invest in technology and operations to make the process of purchasing a plan as simple and easy as possible. III. SHOP exchanges should dissuade small firms from continuing their relationships with traditional brokers once they have signed on with an exchange. Correct Answer D.) I and II only

Which of the following statements describe(s) the federal income tax treatment of qualified long-term care (LTC) insurance premiums? I. If an individual who is not self-employed pays qualified LTC insurance premiums, the premiums are not deductible under any circumstances. II. If an S corporation, partnership, or LLC pays qualified premiums for an employee who is also an owner of the business, the premium is considered compensation. III. If a Subchapter C corporation pays for qualified LTC insurance premiums for an employee, officer, or owner, the amount is 100 percent deductible to the business as a business expense, and the premium is not considered compensation to the employee, officer, or owner. Correct Answer D.) II and III only Which of the following statements regarding health expenditures and related research is correct? A.) In general, risk adjustment models have been able to predict about 80 percent of total claims. B.) Age and gender account for about 90 percent of explained variation in health care expenditures. C.) Medicare currently pays Medicare Advantage plans on the basis of the Centers for Medicare & Medicaid Services Hierarchical Condition Categories (CMS-HCC) model, which uses approximately 70 clinical conditions. D.) Health maintenance organizations (HMOs) that could predict health expenditures only five percentage points better than Medicare would not gain a significant amount of profit per enrollee.

E.) Inpatient expenditures are more predictable than outpatient expenditures. Correct Answer C.) Medicare currently pays Medicare Advantage plans on the basis of the Centers for Medicare & Medicaid Services Hierarchical Condition Categories (CMS-HCC) model, which uses approximately 70 clinical conditions. Which of the following has been a key focus of redesign and improvement efforts in healthcare? A.) Hospital care B.) Diagnostic/imaging services C.) Critical care D.) Orthopedic surgery E.) Primary care medicine Correct Answer E.) Primary care medicine Reference pricing used by some managed care health plans: A.) Is an example of center-of-excellence pricing. B.) Is one method of giving subscribers an incentive to use lower-cost but quality providers. C.) Can only be used in a capitation system. D.) Is a model that has not been used in practice. E.) Is designed to attract healthier individuals into the plan.

. Correct Answer B.) Is one method of giving subscribers an incentive to use lower-cost but quality providers The vast majority of long-term care needs are met by:

A.) Medicare B.) Medicaid C.) Individual health insurance policies D.) Long-term care insurance policies E.) Family members on an unpaid basis Correct Answer E.) Family members on an unpaid basis The practice of hospitals paid based on billed charges by commercial insurers and allowable costs by Medicare ended primarily because: A.) Managed care plans introduced selective contracting into the market. B.) Hospitals started using more advanced technology. C.) Patients became less concerned about the cost of services. D.) Hospitals started to focus more on the quality of services. E.) Physicians gained a greater voice in the pricing of health care. Correct Answer A.) Managed care plans introduced selective contracting into the market. What is the provision in the Part D Medicare law that gives a significant benefit to pharmaceutical companies? A.) The law allows only pharmaceutical companies registered with a specified trade association to market

drugs under Part D and virtually all pharmaceutical companies are so registered B.) The law guarantees a certain profit margin to all pharmaceutical companies that sell drugs under Part D. C.) The law prohibits the government from using its purchasing power to negotiate widespread discounts with drug plans. D.) The law gives all U.S. pharmaceutical companies special income tax benefits for an extended period of time. E.) The law prohibits the widespread dissemination of information regarding specified drugs. Correct Answer C.) The law prohibits the government from using its purchasing power to negotiate widespread discounts with drug plans. The definition of disability for Social Security Disability Insurance benefits requires the impairment to be expected to result in death or to last for a continuous period of at least how many months? A.) Three B.) Four C.) Five D.) Six E.) Twelve Correct Answer E.) Twelve A small employer has a self-funded health plan with reinsurance coverage. Which of the following statements regarding this type of reinsurance is correct?

A.) Aggregate stop-loss reinsurance limits the dollar amount of coverage on each employee's health care costs. B.) Reinsurers often help small employers revise their health plans. C.) Lower "attachment points" decrease the employer's financial risk. D.) Federal law requires stop-loss insurers to provide policyholders an advance notice of at least 90 days before cancelling a policy. E.) Specific stop-loss coverage reinsurance limits the dollar amount of health care costs for an entire employee population over a period of time. Correct Answer C.) Lower "attachment points" decrease the employer's financial risk. Using private exchanges, employers have begun to implement the defined contribution model for medical benefits for which group of individuals? A.) All active full-time employees B.) Active full-time employees with dependent coverage C.) All part-time employees D.) Part-time employees with dependent coverage E.) Retirees and their eligible dependents Correct Answer E.) Retirees and their eligible dependents Objective risk for health insurers is most closely related to which of the following concepts? A.) Expense ratios

B.) Carve out coverage such as prescription drug benefits C.) Dispersion (which is often measured by standard deviation) D.) Investment underwriting E.) Subjective risk Correct Answer C.) Dispersion (which is often measured by standard deviation) Which of the following statements regarding reimbursement methods for patient-centered medical homes (PCMHs) is correct? A.) The most popular approach, by far, is fee-for-service. B.) The most common approach is a capitation system. C.) Typically reimbursement is based on a pay-for- performance approach. D.) A negotiated, or modified, fee-for-service is the most common. E.) Nearly all approaches utilize a blend of pay-for- performance, monthly per-enrollee payments, and fee-for- service. Correct Answer E.) Nearly all approaches utilize a blend of pay-for-performance, monthly per-enrollee payments, and fee-for-service. A life insurance policy in which the insurance provides lifetime protection, the premiums are level, but they are paid only for a certain period is referred to as: A.) Endowment insurance B.) Term to age 65 C.) Straight life D.) Limited payment life

E.) Variable life Correct Answer D.) Limited payment life For long term care (LTC) purposes, the Internal Revenue Code defines a chronically ill individual as one who has been certified by a licensed health care practitioner as unable to perform, without substantial assistance from another individual, at least how many activities of daily living (ADLs) for a period of at least how many days due to a loss of functional capacity? A.) One ADL, 90 days B.) Two ADLs, 90 days C.) Three ADLs, 90 days D.) Two ADLs, 60 days E.) Three ADLs, 60 days Correct Answer B.) Two ADLs, 90 days Which of the following statements regarding Small Business Health Options Program (SHOP) exchanges is correct? A.) SHOP exchanges are marketplaces that are essentially online portals which enable small employers to select from a range of fully insured plans and contribution arrangements for their employees. B.) Plans marketed on SHOP exchanges are exempt from all federal requirements for insurers. C.) SHOP exchanges require employees to contribute at least 50-75% of premium costs.

D.) Employees who receive an employer offer of qualified health care coverage purchased on a SHOP exchange are eligible for federal subsidies. E.) SHOP exchanges are primarily targeted to employers with 50-100 employees. Correct Answer A.) SHOP exchanges are marketplaces that are essentially online portals which enable small employers to select from a range of fully insured plans and contribution arrangements for their employees. Which of the following statements best describes the Affordable Care Act (ACA) approach to the problem of involuntary out-of-network emergency health care? A.) Higher copayments and coinsurance for out-of-network emergency room care is permitted but limited and balance billing is prohibited. B.) Higher copayments and coinsurance for out-of- network emergency room care is allowed, but only for certain specific types of care; balance billing is not allowed. C.) Plans cannot impose higher copayments or coinsurance for out-of-network emergency room care and balance billing is still allowed within certain parameters; these requirements do not apply to grandfathered plans. D.) Plans cannot impose higher copayments or coinsurance for out-of-network emergency room care and balance billing is not allowed; no plans are grandfathered. E.) The ACA has yet to address this issue but new guidance is expected. Correct Answer C.) Plans cannot

impose higher copayments or coinsurance for out-of- network emergency room care and balance billing is still allowed within certain parameters; these requirements do not apply to grandfathered plans. Which of the following statements best describes the financial liability of self-insured plans administered through private health exchanges? A.) The plans can completely cap their financial liabilities by using these exchanges. B.) Using these exchanges, the plans can completely cap their financial liabilities by offering plans with a fixed credit that is not indexed to the rate of general inflation. C.) The plans can shift some of their financial liabilities to the private exchange vendor. D.) The plans can cap most of their financial liabilities by participating in a risk pool established by the exchange vendor. E.) The plans cannot, in general, completely cap their financial liabilities regardless of the delivery vendor they select. Correct Answer E.) The plans cannot, in general, completely cap their financial liabilities regardless of the delivery vendor they select. According to the RAND Health Insurance Experiment, which variable has the greatest power in explaining health expenditures? A.) Welfare eligibility B.) Prior utilization

C.) Physical health (based on self-reported measures) D.) General health (based on self-reported measures) E.) Mental health (based on self-reported measures) Correct Answer B.) Prior utilization A provision in some group life insurance plans that provides for the payment of all or part of the death benefit in the event of the insured's terminal illness is called: A.) Accelerated death benefits B.) Waiver of premiums C.) Maturity value benefits D.) Continuation-of-protection E.) Assignment Correct Answer A.) Accelerated death benefits What reasons are given for the Silver plan being a popular choice among all the Affordable Care Act (ACA) health plans? A.) The Silver plan has the greatest actuarial value of all the plans. B.) Cost-sharing subsidies to lower out-of-pocket costs are available only to people who select the Silver plan. C.) The Silver plan has the greatest benefits, even more than the Gold and Platinum plans. D.) The Silver plan has the lowest out-of-pocket costs of any plan even before any subsidies. E.) Many people select the Silver plan because they are not eligible for the Gold or Platinum plans. Correct Answer

B.) Cost-sharing subsidies to lower out-of-pocket costs are available only to people who select the Silver plan. Which of the following measures of cost is generally used by analysts when they are examining the impact of insurance premiums on employees' choice of health insurance plans? A.) The loading percentage B.) The total gross premium C.) The insurer's profit D.) The employee's out-of-pocket price E.) The expected future gross premium Correct Answer D.) The employee's out-of-pocket price Which of the following statements regarding recognition as a patient-centered medical home (PCMH) is correct? A.) The only organization that can officially recognize a PCMH is the Federally Qualified Health Center Demonstration. B.) The only organization that can officially recognize a PCMH is the National Committee for Quality Assurance (NCQA). C.) No single organization is responsible for recognizing PCMHs. D.) The main organization that recognizes PCMHs is the Joint Commission and the Accreditation Commission for Health Care.

E.) A PCMH can be recognized only by the state in which it is domiciled. Correct Answer C.) No single organization is responsible for recognizing PCMHs. Which of the following statements regarding private health insurance exchanges and Small Business Health Options Program (SHOP) exchanges is correct? A.) A lot of evidence has been produced to show that private exchanges have been designed to make it easier for small business to self-insure. B.) The income tax incentives previously provided to small employers in the SHOP program have expired. C.) Recently states were given the option of making SHOP exchanges mandatory for all employers with fewer than 200 employees. D.) Private exchanges could affect SHOP exchanges by siphoning enrollment from them and thereby reducing revenue (administrative fees) critical to SHOPs' financial viability. E.) Unlike private exchanges, SHOP exchanges do not have the ability to offer small employers a number of plan choices. Correct Answer D.) Private exchanges could affect SHOP exchanges by siphoning enrollment from them and thereby reducing revenue (administrative fees) critical to SHOPs' financial viability. What is the waiting period for Social Security Disability Income (SSDI) benefits? A.) One month

B.) Three consecutive months C.) Five consecutive months D.) Six consecutive months E.) Twelve consecutive months Correct Answer C.) Five consecutive months "Desktop medicine" is a fully integrated approach using information technology whose primary goal is to: A.) Recruit prospective health plan subscribers B.) Help track patients through their plan of care C.) Encourage patient self-diagnosis using the Internet D.) Gather health status metrics for large patient populations E.) Expedite health provider use of technology Correct Answer B.) Help track patients through their plan of care Until now, the biggest source of cost savings with private health insurance exchanges has been: A.) Transition to the defined contribution approach B.) Increased use of technology C.) Employees choosing less generous plans D.) Better health education of employees E.) Elimination or reduction in administrative waste Correct Answer C.) Employees choosing less generous plans Out-of-network health care accounts for approximately what percentage of total covered health insurance expenses?

A.) 3

B.) 10

C.) 20

D.) 25

E.) 30 Correct Answer B.) 10 The major advantage of term insurance for the policyowner is the fact that: A.) A substantial amount of life insurance can be purchased for relatively modest premiums B.) It provides lifetime protection if the insured continues to pay the premiums C.) The premiums remain at the same level for the life of the insured D.) With a policy rider it can be used to provide retirement E.) Premiums are highly competitive especially for those at older ages Correct Answer A.) A substantial amount of life insurance can be purchased for relatively modest premiums Which of the following statements describe(s) the objectives of the risk and market stabilization programs in the Affordable Care Act? I. To redistribute funds from plans with lower-risk enrollees to plans with higher-risk enrollees. II. To provide payments to plans that enroll higher-cost individuals. III. To limit insurer losses and gains beyond an allowable range. Correct Answer E.) I, II and III

Reinsurance is especially important in self-funded health insurance plans. Which of the following statements regarding stop-loss reinsurance for these plans is (are) correct? I. "Lasering" is the process of excluding selected high-cost employees from reinsurance coverage. II. The stop-loss reinsurance contract is almost always limited to one year. III. Stop-loss reinsurance for self-funded health plans is currently regulated almost exclusively at the federal level. Correct Answer B.) II only Which of the following entities have participated in the risk adjustment program of the Affordable Care Act? I. All qualified health plans offered outside the exchange II. Self-insured health plans offered on private exchanges III. Medicare Part D plans Correct Answer A.) None Which of the following statements regarding the Affordable Care Act (ACA) is (are) correct? I. The ACA puts a limit on the medical loss ratio for large and small groups. II. The ACA prohibits medical underwriting. III. The ACA should produce lower health premiums for men and for younger people relative to the premiums for the same coverage prior to the law. Correct Answer D.) I and II only Studies concerning employees' willingness to change health plans when faced with changes in out-of-pocket

premiums show that not all employees have the same degree of price sensitivity. Which of the following groups of employees are less likely to change plans for a given increase in the out-of-pocket premium? I. Enrollees of point-of-service (POS) plans II. Enrollees of health maintenance organization (HMO) plans III. Employees with chronic health conditions Correct Answer C.) III only Which of the following is (are) among the limitations of ordinary whole life insurance? I. Relatively high cost II. Limited flexibility III. No savings fund Correct Answer A.) I only In the patient-centered medical home (PCMH) model, which of the following statements regarding primary care visits is (are) correct? I. The first contact person during such visits might be a generalist, a specialist, or a nurse practitioner. II. Some medical homes use secure messaging through electronic health records for real-time specialist consultation during primary care visits. III. In many practices, it is common to have daily team "huddles" to preview cases. Correct Answer E.) I, II and III Which of the following statements regarding different approaches by which to compensate physicians in managed care plans is (are) correct?

I. Some managed care organizations may prefer to use arrangements that provide no direct link between quality or quantity of physician effort and compensation. II. Some managed care organizations preferring to provide a link between quantity of physician effort and compensation will use a fee-for-service arrangement. III. Some managed care organization will use a capitation arrangement to create incentives for physicians to provide visits and referrals that cost less than the capitated amount. Correct Answer E.) I, II and III Which of the following statements regarding insurer payments and consumer out-of-pocket payments for out- of-network providers is (are) correct? I. Out-of-network providers are not limited to an insurer fee schedule when setting price and often charge more than insurers are willing to reimburse. II. There is evidence that cost-sharing for using an out-of- network provider is decreasing. III. Some out-of-network providers will accept as full payments reimbursements made by insurers or they will negotiate with consumers on price. Correct Answer D.) I and III only Which of the following statements regarding the methodology used by the Affordable Care Act's risk adjustment program is (are) correct? I. The risk adjustment program transfers funds from plans with lower-risk enrollees to plans with higher-risk enrollees.

II. Individual risk scores based on an individual's age and sex are specifically prohibited. III. If an enrollee is receiving subsidies to reduce his or her cost sharing, an induced utilization factor is applied to account for induced demand. Correct Answer C.) I and III only Which of the following statements regarding the strategies that can be used to pursue quality improvement (QI) is (are) correct? I. One of the top strategies that has been identified is to delegate authority to the implementation planners. II. It is now believed that a universal implementation approach for the various practice settings is better than a tailored implementation approach for each practice setting. III. One of the best strategies is to focus on special projects using a team of volunteers. Correct Answer A.) I only Which of the following statements regarding the self- funding of health benefits by small firms are correct? I. Total costs in self-funded plans are lower relative to fully insured product options in large part because traditional insurance premiums include carrier marketing costs and profit margins—factors that are not applicable to self- funded plans. II. With a self-funded plan, a small employer can personalize a benefits package to reflect the needs of its workers.

III. A shift to self-insurance may lead to adverse selection in the fully insured market for small groups. Correct Answer E.) I, II and III Which of the following statements regarding the financing of workers' compensation programs is (are) correct? I. Workers' compensation programs are based on the principle that the cost of work-related accidents is a business expense. II. Employers can purchase workers' compensation insurance from a private carrier or state fund but no state allows this exposure to be self-insured. III. Most state workers' compensation programs rely heavily on the general taxing power of the state to finance workers' compensation. Correct Answer A.) I only Disadvantages of group term life insurance for employees include which of the following? I. Coverage is rarely portable II. Only pure protection is provided III. Coverage is not guaranteed to be permanent Correct Answer E.) I, II and III Research has shown which of the following statements regarding managed health care to be correct? I. While the prevailing public view is that managed health care results in lower quality, little evidence exists on this issue in part because of the difficulty in measuring quality. II. Favorable selection of patients does contribute to the overall lower claims experience that managed care plans enjoy over indemnity plans.