CEBS GBA EXAM 1 ACTUAL EXAM ,PRACTICE EXAM AND
STUDY GUIDE ALL QUESTIONS AND WELL ELABORATED
ANSWERS TOP RATED VERSION FOR 2024-2025 HIGHLY
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What is the basic assumption underlying concept of a free market and how is it challenged by the theory
of "bounded rationality?" (Mod 1.1) - CORRECT ANSWER-Rational customers will make informed
decisions about value, quality and price, while producers who meet consumer's demands will be
rewarded with market share and profit.
What are economic benefits of a free market? (Mod 1.1) - CORRECT ANSWER-If an individual does not
like their provider or health plan, the should be able to "vote with their feet" and select other options.
This choice empowers customers, regulates producers and drives efficiency.
Describe several ways the US Healthcare market does not function like a normal market. (Mod 1.1) -
CORRECT ANSWER-Healthcare market has significant asymmetry in information between consumers,
providers and insurers. Moral hazard is a problem because the marginal cost of covered care is zero,
causing some to over consume medical care.
List several recent initiatives in the US that purport (to claim, often falsely) to use market forces to
increase efficiency in the healthcare system. (Mod 1.1) - CORRECT ANSWER-1) Employers are offering
more HDHPs with some as high as $10,000.
2) ACA is creating marketplaces that employ a form of managed competition where standardized health
plans compete on cost and quality.
3) Public Medicaid and Medicare programs are moving towards requiring or making choices available for
managed care products that structure care within provider networks.
Indicate the approximate percentages of the population covered by major health programs. (Mod 1.2) -
CORRECT ANSWER-Largest portion of Americans (48%) receive health insurance through an Employer,
16% through Medicaid, 15% through Medicare, 6% purchase insurance on their own
How did ACA change Medicare? (Mod 1.2) - CORRECT ANSWER-ACA expanded Medicare's wellness and
prevention benefits, improved prescription drug coverage and financed experiments to control health
care costs by testing alternative payment methods and delivery systems.
,How did ACA change eligibility for Medicaid benefits? (Mod 1.2) - CORRECT ANSWER-ACA shifted
program eligibility from category based (ex: single parents with dependents or people w/disabilities) to
an income-based standard.
how has the ACA affected the number of people who are enrolled in Medicaid? (Mod 1.2) - CORRECT
ANSWER-Medicaid once covered fewer than half of low-income Americans, but now ACA Medcaid
expansion has been steadily increasing enrollment, with largest increase in the states who are
participating.
Explain significance of US Supreme Court case National Federation of Independent Business v Sebelius in
2012 (Mod 1.2) - CORRECT ANSWER-ACA sought to expand Medicaid coverage to all individuals and
families with incomes below 138% of the poverty level. US (first time) would have had a solid safety net
of insurance coverage for all lower income citizens. In the case, the court rules states could choose not
to expand (and Medicaid funding would not be withheld). By Jan 2015, 25 states chose not to expand.
How has ACA affected number of uninsured Americans? (Mod 1.2) - CORRECT ANSWER-Prior to ACA,
16.3% or 49.9 million Americans were uninsured. By 2014, this number reduced to 13% and by the first
quarter of 2016 to 8.6%.
Describe private health insurance coverage with regard to a) size of firm
b) HDHPs with Medical Savings Accounts
c) variability of coverage by states (Mod 1.2) - CORRECT ANSWER-a) 98% of employers with 200+ EE's
offer health insurance but fewer than 45% of firms with 3-9 EE's do so. Larger employers offer more
choice of health plans than smaller employers; small employers tend to offer POS plans that require
higher EE cost sharing to go outside network.
b) In 2006, HDHPs with medical savings accounts accounted for 4% of ER-sponsored market, but by
2012, accounted for over 20%. In 2016, this rose to almost 30%.
c) Range of ER-based options and quality of options available vary widely by state. The percentage of the
population covered by private insurance varies as well as the options for different types of coverage.
What are the basic differences between the four medal categories of ACA health plans? (Mod 1.3) -
CORRECT ANSWER-Bronze, Silver, Gold and Platinum plans all have same actuarial value. However, they
differ in regard to amount of deductibles, coinsurance, other out of pocket costs and premiums. Bronze
plan has lowest premium but most out of pocket costs. Platinum plan has lowest out of pocket cost, but
highest premium.
,Why is the Silver Plan the most popular choice among ACA plans? (Mod 1.3) - CORRECT ANSWER-
Majority who enroll are eligible for federal tax credit subsidies tied to a Silver level plan. People may still
select a higher cost Gold or Platinum plan, but will have to pay higher premiums. Cost-sharing subsidies
to lower out of pocket costs are only available to Silver plans.
Do users of ACA marketplace exchanges have many choices? (Mod 1.3) - CORRECT ANSWER-Ton of
choices and options (ex: in TX, 15 carriers offered an average of 31 plans per county).
Does evidence indicate that consumers choose the most cost-effective medical plan in the marketplace?
(Mod 1.3) - CORRECT ANSWER-people on average choose plan 10% more expensive than what would be
optimal. Other studies suggest limiting variation in plan designs would be choices more comprehensible
(able to understand).
What is the provision in Part D Medicare law that gives a significant benefit to pharmaceutical
companies? (Mod 1.4) - CORRECT ANSWER-Part D Medicare Law prohibits the government from using
its purchasing power to negotiate widespread discounts with drug plans.
Do Medicare Part D beneficiaries have many choices and does the evidence suggest they choose the
most cost-effective plans? (Mod 1.4) - CORRECT ANSWER-Provide numerous choices (ex MA has 27
standalone, TX has 32). Most people do not select the optimal plan or take advantage of open
enrollment periods to obtain a more cost-effective plan. Few people switch plans even when it would be
in their advantage to do so.
Define each part of Medicare (A,B,C,D) and the services provided under each (Mod 1.4 - Reading) -
CORRECT ANSWER-Part A = Hospital Services
Part B = Physician & Diagnostic Services
Part C = Medicare Advantage - Alternative Managed Care Option
Part D = Prescription Drugs
-Greatest choices in Part D and the Medicare Advantage Plan, which is where most of analysis is focused
on.
-C and D are paid out of pocket by recipients; A & B are funded by payroll deductions (taxes)
What is Medicare Part C and why do some people select it? (Mod 1.4) - CORRECT ANSWER-AKA
Medicare Advantage:
, -Recipients have the option to enroll in a health plan with a narrowed network of hospitals and
providers that covers Part A and B but with lower out of pocket costs. These plans often include their
own prescription drug coverage. Unlike Part D, this is a voluntary choice and beneficiaries always have
the option of going back to the traditional plan. It is a choice to restrict options and consolidate the
different elements of Medicare, including cost sharing.
People select these plans because of lower costs and greater care coordination. Like Part D, Part C has
significant state variation.
What have researchers found with regard to consumer benefits and efficiency of Medicare Part C? (Mod
1.4) - CORRECT ANSWER-45 studies - in general that Part C's HMO and PPO programs have a better
record than traditional fee for service plans in the provision of preventive services and the more
efficient use of resources. Despite high performance, a sub-group of sick beneficiaries in traditional
Medicare tends to rate their care more favorably than beneficiaries in Part C - due to easier access to
specialists. Compared to Part D (which provides a separate, uncoordinated prescription drug benefit),
choice here is less complex and could lead to greater consumer benefits and efficiency.
Discuss consumer choices for Physicians and Hospitals in the Medicaid Program (Mod 1.4) - CORRECT
ANSWER-Federal government mandates open choice to both Phys & Hospitals; however, in the 90s,
states could obtain waivers for this provision and require Medicaid recipients to enroll in a limited-
network managed care plan (most states did).
Continued movement to Medicaid Managed Care Organizations (MMCOs) - with comprehensive
coverage paid on a risk basis.
MMCOs receive a per-member, per-person payment to provide defined set of benefits for all.
Traditionally, Medicaid pays physicians much less than private insurance or Medicare - this limits the
number of physicians who may take Medicaid, which will limit choice.
What is the difference between Medicare and Medicaid? (Mod 1.4 - Reading) - CORRECT ANSWER-
Medicare: Medicare is a federal program attached to Social Security. It is available to all U.S. citizens 65
years of age or older and it also covers people with certain disabilities. It is available regardless of
income.
Medicaid: Medicaid is a joint federal and state program that helps low-income individuals and families
pay for the costs associated with medical and long-term custodial care. The federal government funds
up to 50% of the cost of each state's Medicaid program, with more affluent states receiving less funding
than less affluent states. Because of this federal/state partnership, there are actually 50 different
Medicaid programs, one for each state.
