AHIP AHM-520 Exam Dumps - Updated Apr 2024

Question 1

The Jade Health Plan used a profitability index (PI) to rank the following capital proposals:

Proposal PI

A 0.45

B 1.05

This information indicates that, of these two projects, Jade would most likely select:

AProposal A, and the PI indicates that the net present value (NPV) for this project is less than zero

BProposal A, and the PI indicates that the net present value (NPV) for this project is greater than zero

CProposal B, and the PI indicates that the net present value (NPV) for this project is less than zero

DProposal B, and the PI indicates that the net present value (NPV) for this project is greater than zero

Question 2

The following information was presented on one of the financial statements prepared by the Rouge Health Plan as of December 31, 1998:

Rouge's current ratio at the end of 1998 was approximately equal to:

A0.84

B1.06

C1.19

D1.31

Question 3

All publicly traded health plans in the United States are required to prepare financial statements for use by their external users in accordance with generally accepted accounting principles (GAAP). In addition, health insurers and health plans that fall under the jurisdiction of state insurance departments are required by law to prepare certain financial statements in accordance with statutory accounting practices (SAP). In a comparison of GAAP to SAP, it is correct to say that:

AGAAP is established and promoted by the National Association of Insurance Commissioners (NAIC), whereas SAP is established and promoted by the Financial Accounting Standards Board (FASB)

BThe going-concern concept is an underlying premise of GAAP, whereas SAP tends to focus on the liquidation value of the MCO or the insurer

CGAAP provides for a single method of valuing all of a health plan's assets, whereas SAP offers the health plan more than one method for valuing its assets

DThe principle of conservatism is fundamental to GAAP, whereas SAP generally is not conservative in nature

Question 4

The following statements are about rate ratios used by health plans. Select the answer choice containing the correct statement:

AWhile rate ratios consider family size, they are most often based on competitive factors, such as the ratios being used by competitors and the ratios that plan sponsors are requesting.

BIf the rate ratio for a couple rate category is 2.0, then the single premium is divided by 2.0 to derive the couple rate category premium.

CA rate ratio can only be increased if the health plan has obtained regulatory approval.

DThe effect of a typical family rate ratio is that a family rate is somewhat higher than it otherwise should be, and the single rate is somewhat lower that it otherwise should be.

Question 5

One way that a health plan can protect itself against case stripping is by requiring:

AEmployees covered by a small group plan to contribute 100% of the cost of the healthcare coverage

BThe small group to have no more than 10 members

CA minimum level of participation in order for a small group to be eligible for healthcare coverage

DIts underwriters to consider the characteristics of the employer, but not of the group members, when underwriting the group

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