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AHIP AHM-520 Exam - Topic 5 Question 35 Discussion

Contingency risks, or C-risks, are general categories of risk that have a direct bearing on both the cash flow and solvency of a health plan. One of these C-risks, pricing risk (C-2 risk), is typically the most important risk a health plan faces. Pricing risk is crucial to a health plan's solvency because:
D) A sizable portion of the total expenses and liabilities faced by a health plan come from contractual obligations to pay future medical costs, and the exact amounts of those costs are not known at the time a product's premium is established
A) A sizable portion of any health plan's assets are held in long-term investments and any shift in interest rates can significantly impact a health plan's ability to pay medical benefits
B) A health plan relies heavily on the sound judgment of its management, and poor management decisions can result in financial losses for the health plan
C) A situation in which actual expenses exceed the amounts budgeted for those expenses may result in the health plan failing to retain assets sufficient to cover current obligations

AHIP AHM-520 Exam - Topic 5 Question 35 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 35
Topic #: 5
[All AHM-520 Questions]

Contingency risks, or C-risks, are general categories of risk that have a direct bearing on both the cash flow and solvency of a health plan. One of these C-risks, pricing risk (C-2 risk), is typically the most important risk a health plan faces. Pricing risk is crucial to a health plan's solvency because:

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Suggested Answer: D

by Lili at May 05, 2022, 07:56 PM

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Dominga
8 months ago
D makes sense, but it feels risky not knowing future costs upfront.
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Jutta
8 months ago
C is spot on! Actual expenses can really mess up a budget.
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Margurite
8 months ago
Wait, are we really saying management decisions can tank a whole health plan?
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Luisa
8 months ago
I agree, especially with all the unknowns in future medical costs.
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Kayleigh
8 months ago
Pricing risk is definitely a big deal for health plans.
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Lili
9 months ago
I've got this! The answer is C. Execute the 'expert' command in the cli.sh shell to switch to the advanced shell and run Linux commands.
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Tomas
9 months ago
I'm a little confused by the wording of this question. What exactly do they mean by the "BEST way" to demonstrate success? Are they looking for the most comprehensive, the most efficient, or the most convincing approach? I'll need to carefully analyze each option to determine which one best fits the criteria.
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Vincenza
9 months ago
Hmm, I'm a bit unsure about this one. There are a few different settings mentioned that could potentially impact the closest resource selection. I'll need to think through the details of each option carefully.
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