HAN 300 FINAL | 104 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH COMPLETE
SOLUTION.
General concepts of insurance - (ANSWER)Insurance
protects against risk
Risk
the possibility of substantial financial loss from some event, where
probability of occurrence is small
Underwriting
evaluation, selection (or rejection), classification, and rating of risk
Four principles of insurance - (ANSWER)1) Risk is unpredictable
2) Risk can be predicted with some accuracy in a large group
3) Insurance can transfer risk from the individual to group through pooling of resources
4) Losses are shared by all members
beneficiary - (ANSWER)the insured
premium - (ANSWER)amount charged to insurer to insure against risk
employer-employee cost sharing
risk rating - (ANSWER)Experience rating - premiums can be unaffordable for high-risk groups
Community rating - good risks subsidize poor risks
Adjusted community rating - overcomes some of the above drawbacks (*required by the ACA*)
cost sharing - (ANSWER)types:
,HAN 300 FINAL | 104 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH COMPLETE
SOLUTION.
deductible
copayment
coinsurance
why? reduces moral hazard. impacts lowering utilization without significant health consequences
deductible - (ANSWER)Amount the insured pays first before benefits are paid by the plan
Applied annually
copayment - (ANSWER)flat amount paid per service
coinsurance - (ANSWER)set proportion of medical costs
vision and dental - (ANSWER)coverage for these are generally not included in health insurance
Group insurance - (ANSWER)type of private insurance
anticipates that a substantial number of people in the group will purchase insurance through its
sponsor.
because risk is spread out among the many insured, group insurance provides the advantage of *lower
costs* than if the same type of coverage was purchased in the individual insurance market
Tax advantages when it is obtained through the employer
Comprehensive coverage is an anomaly to the fundamental concepts of insurance
,HAN 300 FINAL | 104 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH COMPLETE
SOLUTION.
self insurance - (ANSWER)type of private insurance
Spurred by public policy
No premium tax on employers
ERISA 1974
Exempt from some of the ACA requirements
the employer acts as its own insurere instead of obtaining insurance through an insurance company. can
protect themselves from risk of high losses by purchasing reinsurance
individual private health insurance - (ANSWER)Nongroup plans
Premiums based on individual's health and demographics
Many lost coverage under the ACA
small but important source of coverage. farmer, early retiree, self employed, and employee of business
that doesnt offer health insurance
managed care plans - (ANSWER)Initially, these plans were different from commercial health insurance
Now, most health insurance is in the form of managed care plans
high deductible health plans/ savings options - (ANSWER)HRA:
Funded by the employer
HDHP is optional
HSA:
Employer contribution is optional
, HAN 300 FINAL | 104 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH COMPLETE
SOLUTION.
HDHP is required
combine a savings option with a health insurance plan carrying a high deductible. premiums are
generally lower because of the high deductibles.
Medigap - (ANSWER)Medicare supplement insurance
- To cover the high out-of-pocket costs in the original Medicare program
- Not available to those covered by Medicare Advantage (Part C of Medicare)
Influence of financing on the delivery of health care - (ANSWER)Financing is needed to pay health
insurance premiums
Health insurance is the primary mechanism to obtain health care services
Despite the ACA, charity will play a noteworthy role for the uninsured
Insurance increases demand for health care
Insurance lowers out-of-pocket costs
patients consume more (moral hazard)
Financing influences supply of health care
-Production of health care services - capital expenditures, renovations, expansions
-New services and technology proliferate when they are covered by health insurance
New models of health care organization may form
Supply and distribution of health care professionals is affected
SOLUTION.
General concepts of insurance - (ANSWER)Insurance
protects against risk
Risk
the possibility of substantial financial loss from some event, where
probability of occurrence is small
Underwriting
evaluation, selection (or rejection), classification, and rating of risk
Four principles of insurance - (ANSWER)1) Risk is unpredictable
2) Risk can be predicted with some accuracy in a large group
3) Insurance can transfer risk from the individual to group through pooling of resources
4) Losses are shared by all members
beneficiary - (ANSWER)the insured
premium - (ANSWER)amount charged to insurer to insure against risk
employer-employee cost sharing
risk rating - (ANSWER)Experience rating - premiums can be unaffordable for high-risk groups
Community rating - good risks subsidize poor risks
Adjusted community rating - overcomes some of the above drawbacks (*required by the ACA*)
cost sharing - (ANSWER)types:
,HAN 300 FINAL | 104 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH COMPLETE
SOLUTION.
deductible
copayment
coinsurance
why? reduces moral hazard. impacts lowering utilization without significant health consequences
deductible - (ANSWER)Amount the insured pays first before benefits are paid by the plan
Applied annually
copayment - (ANSWER)flat amount paid per service
coinsurance - (ANSWER)set proportion of medical costs
vision and dental - (ANSWER)coverage for these are generally not included in health insurance
Group insurance - (ANSWER)type of private insurance
anticipates that a substantial number of people in the group will purchase insurance through its
sponsor.
because risk is spread out among the many insured, group insurance provides the advantage of *lower
costs* than if the same type of coverage was purchased in the individual insurance market
Tax advantages when it is obtained through the employer
Comprehensive coverage is an anomaly to the fundamental concepts of insurance
,HAN 300 FINAL | 104 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH COMPLETE
SOLUTION.
self insurance - (ANSWER)type of private insurance
Spurred by public policy
No premium tax on employers
ERISA 1974
Exempt from some of the ACA requirements
the employer acts as its own insurere instead of obtaining insurance through an insurance company. can
protect themselves from risk of high losses by purchasing reinsurance
individual private health insurance - (ANSWER)Nongroup plans
Premiums based on individual's health and demographics
Many lost coverage under the ACA
small but important source of coverage. farmer, early retiree, self employed, and employee of business
that doesnt offer health insurance
managed care plans - (ANSWER)Initially, these plans were different from commercial health insurance
Now, most health insurance is in the form of managed care plans
high deductible health plans/ savings options - (ANSWER)HRA:
Funded by the employer
HDHP is optional
HSA:
Employer contribution is optional
, HAN 300 FINAL | 104 QUESTIONS AND ANSWERS | 2026 UPDATE | WITH COMPLETE
SOLUTION.
HDHP is required
combine a savings option with a health insurance plan carrying a high deductible. premiums are
generally lower because of the high deductibles.
Medigap - (ANSWER)Medicare supplement insurance
- To cover the high out-of-pocket costs in the original Medicare program
- Not available to those covered by Medicare Advantage (Part C of Medicare)
Influence of financing on the delivery of health care - (ANSWER)Financing is needed to pay health
insurance premiums
Health insurance is the primary mechanism to obtain health care services
Despite the ACA, charity will play a noteworthy role for the uninsured
Insurance increases demand for health care
Insurance lowers out-of-pocket costs
patients consume more (moral hazard)
Financing influences supply of health care
-Production of health care services - capital expenditures, renovations, expansions
-New services and technology proliferate when they are covered by health insurance
New models of health care organization may form
Supply and distribution of health care professionals is affected
