Free AHM-520 Exam Braindumps

- (Topic 2)
The following paragraph contains two pair of terms enclosed in parentheses. Determine which term in each pair correctly completes the statements. Then select the answer choice containing the two terms you have chosen.
In a typical health plan, an (actuary / underwriter) is ultimately responsible for the determination of the appropriate rate to charge for a given level of healthcare benefits and administrative services in a particular market. The (actuary / underwriter) assesses and classifies the degree of risk represented by a proposed group or individual.

1. A. actuary / actuary
2. B. actuary / underwriter
3. C. underwriter / actuary
4. D. underwriter / underwriter

Correct Answer: B

- (Topic 1)
One true statement about the rate ratios used by a health plan is that the

1. A. End result of a typical family rate ratio is that the health plan's family rate is subsidized by its single premium rate
2. B. health plan cannot arbitrarily increase or decrease its rate ratio for a rate category
3. C. rate ratios used by the health plan most likely have been established by government regulations
4. D. health plan should determine its rate ratios by considering family size alone rather than competitive factors such as the ratios that competitors are using

Correct Answer: A

- (Topic 2)
Mandated benefit laws are state or federal laws that require health plans to arrange for the financing and delivery of particular benefits. Ways that mandated benefits have the potential to influence health plans include:
* 1. Causing a lower degree of uniformity among health plans of competing health plans in a given market
* 2. Increasing the cost of the benefit plan to the extent that the plan must cover mandated benefits that would not have been included in the plan in the absence of the law or regulation that mandates the benefits

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

Correct Answer: C

- (Topic 1)
The following statement(s) can correctly be made about a health plan's underwriting of small groups:

1. 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.
2. B. In the absence of laws mandating otherwise, a health plan's underwriting standardsgrow stricter as group size gets smaller.
3. C. Both A and B
4. D. A only
5. E. B only
6. F. Neither A nor B

Correct Answer: A

- (Topic 2)
The following transactions occurred at the Lane Health Plan:
✑ Transaction 1 — Lane recorded a $25,000 premium prior to receiving the payment
✑ Transaction 2 — Lane purchased $500 in office expenses on account, but did not record the expense until it received the bill a month later
✑ Transaction 3 — Fire destroyed one of Lane’s facilities; Lane waited until the facility was rebuilt before assessing and recording the amount of loss
✑ Transaction 4 — Lane sold an investment on which it realized a $14,000 gain; Lane recorded the gain only after the sale was completed.
Of these transactions, the one that is consistent with the accounting principle of conservatism is:

1. A. Transaction 1
2. B. Transaction 2
3. C. Transaction 3
4. D. Transaction 4

Correct Answer: D