The Following Statement(s) Can Correctly Be Made About a Health

question 174

Multiple Choice

The following statement(s) can correctly be made about a health plan's underwriting of small groups:

• A) Typically, a health plan medically underwrites both the employees of a small group and their dependents, even though small group reform laws prohibit health plans from singling out individuals for rejection or substandard rate-ups.
• B) In the absence of laws mandating otherwise, a health plan's underwriting standards grow stricter as group size gets smaller.
• C) Both A and B
• D) A only
• E) B only
• F) Neither A nor B

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Definitions:

Willingness to Pay

The maximum amount an individual is prepared to spend for a particular good or service.

Consumer Surplus

The gap between the aggregate amount that buyers are willing and able to allocate for a good or service and the total sum they really pay.

Consumer Surplus

The variance between consumers' potential payment for a good or service and their actual expenditure.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating sensitivity to price changes.