AHIP AHM-520 Exam - Topic 4 Question 95 Discussion

Actual exam question for AHIP's AHM-520 exam

Question #: 95
Topic #: 4

The Northwest Company offers its employees the option of choosing to receive their healthcare benefits from an HMO or from a traditional indemnity plan. The premiums for the HMO are lower than for the traditional indemnity plan. In this situation, it is correct to assume that:

1. Individual low utilizers are more likely to enroll in the traditional indemnity plan

2. Individual high utilizers are more likely to enroll in the HMO

ABoth 1 and 2

B1 only

C2 only

DNeither 1 nor 2

Show Suggested Answer

Suggested Answer: D

by Daniel at Aug 22, 2024, 08:59 PM

Limited Time Offer

25%

Off

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

Contribute your Thoughts:

Submit Cancel

Bettye

5 months ago

Traditional plans usually attract those who want more control over their care.

upvoted 0 times

...

Claribel

5 months ago

Totally agree, high utilizers need more coverage, HMO fits!

upvoted 0 times

...

Valentin

6 months ago

Wait, are high utilizers really going for the HMO? Seems odd.

upvoted 0 times

...

Mabelle

6 months ago

I think low utilizers would prefer the indemnity plan for flexibility.

upvoted 0 times

...

Carlton

6 months ago

HMO premiums are definitely lower, so that makes sense.

upvoted 0 times

...

Marnie

6 months ago

I'm a bit confused about the first statement. Wouldn't low utilizers be more cost-conscious and therefore choose the cheaper HMO?

upvoted 0 times

...

Virgina

7 months ago

This question feels familiar; I think we practiced something similar where we talked about risk selection in health plans.

upvoted 0 times

...

Allene

7 months ago

I think high utilizers would definitely lean towards the HMO because of the lower premiums and better access to care, but I can't recall if that's always true.

upvoted 0 times

...

Vincenza

7 months ago

I remember discussing how low utilizers might prefer the traditional plan for more flexibility, but I'm not entirely sure if that's the case here.

upvoted 0 times

...

In

7 months ago

This is a classic case of adverse selection. The low-risk individuals will self-select into the traditional indemnity plan, while the high-risk individuals will choose the HMO with the lower premiums. I'm confident I can apply this concept correctly on the exam.

upvoted 0 times

...

Rene

7 months ago

Okay, I think I've got this. The key is that the HMO premiums are lower, so the high utilizers will be more likely to choose the HMO to get better coverage at a lower cost. The low utilizers will prefer the traditional indemnity plan since they won't need the extra benefits of the HMO.

upvoted 0 times

...

Lavonna

7 months ago

Hmm, I'm a little unsure about this one. I know adverse selection is a key concept, but I'm not totally confident in applying it to this specific scenario. Let me re-read the question carefully.

upvoted 0 times

...

Mireya

7 months ago

This seems like a straightforward question about adverse selection in healthcare plans. I'll need to think through the incentives for low and high utilizers to choose between the HMO and indemnity plan.

upvoted 0 times

...

Loren

7 months ago

This question seems pretty straightforward. I'll focus on the key points about the Content Service and normalization rules.

upvoted 0 times

...

Carmelina

2 years ago

D) Neither 1 nor 2? What kind of trick question is this? Of course individual risk profiles would determine their plan choice. I'm not falling for that one!

upvoted 0 times

...

Starr

2 years ago

Hey, if I'm a high utilizer, I'm definitely going for the traditional plan! Why would I willingly sign up for the HMO plan and have to jump through hoops to see a specialist? A) Both 1 and 2 is the way to go.

upvoted 0 times

...

Latrice

2 years ago

I see your point, Tegan. So, the answer could be both 1 and 2.

upvoted 0 times

...

Tegan

2 years ago

But wouldn't individual high utilizers benefit more from the comprehensive coverage of the HMO?

upvoted 0 times

...

Jestine

2 years ago

I'm going with C) 2 only. It just makes sense that people who expect to use more healthcare services would choose the HMO to get the lower premiums, even if it means more restrictions.

upvoted 0 times

Janey

2 years ago

I think I would go with A) Both 1 and 2, because low utilizers might prefer the traditional indemnity plan for more flexibility.

upvoted 0 times

...

Charlene

2 years ago

I agree with you, C) 2 only seems like the logical choice for high utilizers.

upvoted 0 times

...

Barrett

2 years ago

I agree with Tom, the lower premiums would be more attractive to low utilizers.

upvoted 0 times

...

Tom

2 years ago

I think individual low utilizers would prefer the traditional indemnity plan.

upvoted 0 times

...

Dwight

2 years ago

I think the correct answer is B) 1 only. Low utilizers would logically choose the cheaper HMO plan, while high utilizers would be more likely to opt for the traditional indemnity plan with its higher premiums but wider coverage.

upvoted 0 times