The Fiesta Health Plan Prices Its Products in Such a Way

question 138

Multiple Choice

The Fiesta Health Plan prices its products in such a way that the rates for its products are reasonable, adequate, equitable, and competitive. Fiesta is using blended rating to calculate a premium rate for the Murdock Company, a large employer. Fiesta has assigned a credibility factor of 0.6 to Murdock. Fiesta has also determined that Murdock's manual rate is $200 PMPM and that Murdock's experience rate is $180 PMPM. According to regulations, Fiesta's premium rates are reasonable if they

• A) vary only on the factors that affect Fiesta's costs
• B) are at a level that balances Fiesta's need to generate a profit against its need to obtain or retain a specified share of the market in which it conducts business
• C) are high enough to ensure that Fiesta has enough money on hand to pay operating expenses as they come due
• D) do not exceed what Fiesta needs to cover its costs and provide the plan with a fair profit

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Definitions:

Religious Fervour

Intense and passionate devotion or zeal towards one's religion.

Collective Action

The efforts of a group of people working together towards a common goal, often in pursuit of social, political, or environmental change.

Sacred And The Profane

A concept distinguishing between what is considered holy, divine, or spiritually significant and what is not regarded as sacred in religious context.

Religious Practices

Rituals, ceremonies, and behaviors associated with the worship or belief in a higher power or deity.