AHIP Exam AHM-520 Topic 6 Question 93 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 93
Topic #: 6

The following statements are about a health plan's pricing of a preferred provider organization (PPO) plan. Three of the statements are true, and one statement is false. Select the answer choice containing the FALSE statement.

ATypically, the first step in pricing a PPO is to develop a base indemnity claims cost, which results from adjusting the indemnity plan as though the entire eligible group of employees is enrolled in the indemnity plan.

BTo develop the expected claims costs for the in-network PPO plan, the health plan's actuaries adjust the base indemnity claims costs to reflect pertinent characteristics of the plan, including the specific network plan design and provider discount arrangements.

COne difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.

DAfter the health plan's actuaries use risk adjustment factors to adjust the existing claims costs for selection issues, the actuaries weight the in network and out-of-network costs to arrive at a composite claims cost for the PPO plan.

Show Suggested Answer

Suggested Answer: C

by Cathrine at Jul 18, 2024, 07:15 PM

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Blair

1 months ago

Ah, the joys of actuarial pricing. It's like a game of 'Guess the False Statement' - except the stakes are higher than a game night bet. Good thing these actuaries have a sense of humor, or they'd be as dry as the desert.

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Phil

C) One difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.

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Sylvie

3 days ago

B) To develop the expected claims costs for the in-network PPO plan, the health plan's actuaries adjust the base indemnity claims costs to reflect pertinent characteristics of the plan, including the specific network plan design and provider discount arrangements.

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Brynn

15 days ago

A) Typically, the first step in pricing a PPO is to develop a base indemnity claims cost, which results from adjusting the indemnity plan as though the entire eligible group of employees is enrolled in the indemnity plan.

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Tran

2 months ago

Yep, A is the false one. I mean, who would be crazy enough to price a PPO plan based on an indemnity plan? That's like trying to build a skyscraper using toothpicks.

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Anthony

14 days ago

Definitely, weighting the in-network and out-of-network costs is crucial for pricing a PPO plan accurately.

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Leila

30 days ago

It's important to adjust the base indemnity claims costs to reflect the specific characteristics of the PPO plan.

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Shonda

1 months ago

I agree, pricing a PPO plan based on an indemnity plan doesn't make sense.

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Bethanie

2 months ago

Haha, A is definitely the odd one out. Developing an indemnity plan as the base? What is this, the 1980s? Get with the times, people!

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Anissa

4 days ago

D) After the health plan's actuaries use risk adjustment factors to adjust the existing claims costs for selection issues, the actuaries weight the in network and out-of-network costs to arrive at a composite claims cost for the PPO plan.

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Felicitas

4 days ago

C) One difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.

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Joesph

6 days ago

C) One difficulty in pricing a PPO is that the health plan's actuaries have no method of estimating which employees would be likely to select which provider groups.

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Twila

13 days ago

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Keshia

1 months ago

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Kimberely

1 months ago

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Veronique

1 months ago

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Theron

2 months ago

I agree, A is the false statement. Everyone knows the base is the PPO plan, not some hypothetical indemnity plan. These actuaries must be living in the past.

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Niesha

1 months ago

I disagree, C makes sense. I believe D is the false statement. Actuaries don't weight in-network and out-of-network costs for a composite claims cost.

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Jordan

1 months ago

I think C is the false statement. Actuaries must have some way of estimating employee preferences.

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Xochitl

2 months ago

I disagree. I believe the false statement is D because actuaries do not weight in-network and out-of-network costs to arrive at a composite claims cost.

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Reed

2 months ago

The false statement is A. Typically, the first step in pricing a PPO is to develop a base indemnity claims cost. That's just plain wrong, the base should be the PPO plan design, not an indemnity plan.

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