AHIP Exam AHM-520 Topic 6 Question 105 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 105
Topic #: 6

For a given healthcare product, the Magnolia Health Plan has a premium of $80 PMPM and a unit variable cost of $30 PMPM. Fixed costs for this product are $30,000 per month. Magnolia can correctly calculate the break-even point for this product to be:

A274 members

B375 members

C600 members

D1,000 members

Show Suggested Answer

Suggested Answer: C

by Hayley at Jan 11, 2025, 07:39 PM

Limited Time Offer

25%

Off

Get Premium AHM-520 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Annamae

3 months ago

Haha, I bet the exam writers are trying to catch us with some tricky math here. Good thing we're all sharp-minded healthcare professionals, am I right?

upvoted 0 times

Kendra

1 months ago

D) 1,000 members

upvoted 0 times

...

Graciela

1 months ago

C) 600 members

upvoted 0 times

...

Rosenda

2 months ago

B) 375 members

upvoted 0 times

...

Ria

2 months ago

A) 274 members

upvoted 0 times

...

Emily

3 months ago

Ah, I see what you mean, Carma. The break-even point is where total revenue equals total costs, so we need to set (PMPM revenue * members) = (PMPM variable cost * members) + fixed costs. Solving for members gives us the answer C. 600 members.

upvoted 0 times

...

Carma

3 months ago

Hmm, I'm not so sure. Shouldn't we be looking at the total revenue and total costs to find the break-even point? Let me double-check the calculations.

upvoted 0 times

...

Norah

3 months ago

I think the answer is B. 375 members. The fixed costs are $30,000 and the contribution margin per member is $50 ($80 PMPM - $30 PMPM), so the break-even point would be $30,000 / $50 = 375 members.

upvoted 0 times