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AHIP AHM-520 Exam - Topic 5 Question 114 Discussion

The Longview Hospital contracted with the Carlyle Health Plan to provide inpatient services to Carlyle's enrolled members. Carlyle provides Longview with a type of stop-loss coverage that protects, on a claims incurred and paid basis, against losses arising from significantly higher than anticipated utilization rates among Carlyle's covered population. The stop-loss coverage specifies an attachment point of 130% of Longview's projected $2,000,000 costs of treating Carlyle plan members and requires Longview to pay 15% of any costs above the attachment point. In a given plan year, Longview incurred covered costs totaling $3,000,000.With regard to the type of stop-loss coverage provided to Longview by Carlyle and to whether this coverage is classified as insurance or reinsurance, the risk transfer approach used in this situation can be described as:
C) specific stop-loss reinsurance
A) aggregate stop-loss reinsurance
B) aggregate stop-loss insurance
D) specific stop-loss insurance

AHIP AHM-520 Exam - Topic 5 Question 114 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 114
Topic #: 5
[All AHM-520 Questions]

The Longview Hospital contracted with the Carlyle Health Plan to provide inpatient services to Carlyle's enrolled members. Carlyle provides Longview with a type of stop-loss coverage that protects, on a claims incurred and paid basis, against losses arising from significantly higher than anticipated utilization rates among Carlyle's covered population. The stop-loss coverage specifies an attachment point of 130% of Longview's projected $2,000,000 costs of treating Carlyle plan members and requires Longview to pay 15% of any costs above the attachment point. In a given plan year, Longview incurred covered costs totaling $3,000,000.

With regard to the type of stop-loss coverage provided to Longview by Carlyle and to whether this coverage is classified as insurance or reinsurance, the risk transfer approach used in this situation can be described as:

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Suggested Answer: C

by Margurite at Jul 10, 2025, 07:51 AM

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Alyce
8 months ago
I agree with Gabriele, reinsurance makes more sense here.
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Laurel
8 months ago
I think it's aggregate stop-loss insurance, not reinsurance.
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Donte
8 months ago
Not sure about this one, could it be specific stop-loss instead?
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Ronnie
8 months ago
Wait, so Longview pays 15% over the attachment point? That's surprising!
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Gabriele
8 months ago
This is definitely aggregate stop-loss reinsurance.
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Billi
9 months ago
I’m leaning towards specific stop-loss insurance because of the way the costs are structured, but I need to double-check my notes on this.
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Hester
9 months ago
I practiced a similar question where we had to identify types of stop-loss. I feel like the attachment point indicates it's aggregate, but I could be wrong.
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Annice
9 months ago
I think this is aggregate stop-loss insurance since it covers total costs above a certain point, but I might be mixing it up with reinsurance.
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Rolande
9 months ago
I remember discussing stop-loss coverage in class, but I'm not sure if this is aggregate or specific.
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Tawny
10 months ago
I've got this! The question is asking about the risk transfer approach, and based on the information provided, it sounds like Carlyle is offering aggregate stop-loss reinsurance to Longview. The attachment point and Longview's responsibility for 15% of costs above that point are the giveaways.
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Nancey
10 months ago
Okay, let me break this down. The key details are that Carlyle provided stop-loss coverage to Longview, with an attachment point of 130% of Longview's projected costs. I just need to figure out if that's considered aggregate or specific stop-loss, and whether it's classified as insurance or reinsurance.
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Delmy
10 months ago
Hmm, I'm a little unsure about the difference between insurance and reinsurance here. I'll need to think through the details of the coverage to determine which one it is.
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Noel
10 months ago
This one seems pretty straightforward. I think it's asking me to identify the type of stop-loss coverage that Carlyle provided to Longview.
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Evette
12 months ago
I see your point, Amos, but I still think A) is the best choice based on the information provided.
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Amos
1 year ago
I'm not sure, but I think it could also be C) specific stop-loss reinsurance.
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Catalina
1 year ago
This is a tricky one, but I'm leaning towards A) aggregate stop-loss reinsurance. The attachment point and the percentage of costs above that point make it sound like a reinsurance arrangement to me.
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Karma
10 months ago
Yeah, it definitely seems more like reinsurance than insurance.
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Kati
10 months ago
Yes, the terms of the coverage definitely align more with reinsurance than insurance.
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James
11 months ago
I agree, the attachment point and cost-sharing percentage point towards reinsurance.
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Doretha
12 months ago
I'm not sure, but it does seem like a reinsurance setup.
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Lawrence
12 months ago
I agree, the attachment point and cost percentage point towards reinsurance.
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Joaquin
12 months ago
I think it's A) aggregate stop-loss reinsurance.
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Lavera
12 months ago
I think you're right, it does seem more like a reinsurance arrangement.
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Naomi
1 year ago
I agree with Evette, because the attachment point is based on Longview's total costs.
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Zona
1 year ago
Haha, this question is making my head spin! I'm just going to go with the flow and pick D) specific stop-loss insurance. Who knows, maybe I'll get lucky!
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Herminia
1 year ago
Hmm, I'm not so sure. The question mentions 'on a claims incurred and paid basis,' which makes me think it could be C) specific stop-loss reinsurance.
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Justine
1 year ago
I think the answer is B) aggregate stop-loss insurance. The coverage seems to protect Longview against higher than anticipated utilization rates, which suggests an aggregate approach rather than a specific one.
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Arlean
12 months ago
Yes, I think you're right. The coverage provided by Carlyle to Longview fits the description of aggregate stop-loss insurance.
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Bette
12 months ago
I agree, it does seem like B) aggregate stop-loss insurance would be the correct answer.
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Evette
1 year ago
I think the answer is A) aggregate stop-loss reinsurance.
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