Multiple Choice Quiz


1	Economists see the need for a government run health insurance program for the elderly primarily because
		A)	the elderly are poorer than the rest of the population.
		B)	the private market for health insurance for the elderly will fail because of adverse selection and difficulties defining a group.
		C)	the private market prices will be high because of the high use by the elderly of medical services.
		D)	health insurance markets generally do not work.


2	"Adverse selection" is a problem in health insurance because
		A)	only the healthy will be willing to buy health insurance.
		B)	insurance companies will refuse to offer coverage to the sick.
		C)	hospitals will refuse to treat the sick.
		D)	those that need insurance the most will continue to drive the price up which will make it so that only the sickest buy insurance.


3	To battle adverse selection, the health insurance industry prefers to sell its products to definable groups. This doesn't work for the elderly because
		A)	their groups are defined by the city they live in.
		B)	groups are usually defined by places of employment and the elderly are likely to not work.
		C)	groups are usually defined by their high school graduating class and too many are dead to form a group.
		D)	the elderly have diverse health care needs.


4	The intended Medicare cost split at the programs inception was ______ (taxpayer burden, recipient burden) but now it is ______.
		A)	50%-50% ; 75%-25%
		B)	75%-25% ; 50%-50%
		C)	50%-50% ; 100%-0%
		D)	100%-0% ; 50%-50%


5	The costs of the Medicare program have increased far faster than inflation because
		A)	the proportion of the population over 65 continues to rise.
		B)	there are many new and expensive treatments today for conditions that affect the elderly.
		C)	prescription drug prices have risen substantially.
		D)	a) and b)


6	As a means of saving money Medicare Part A went to a system of
		A)	denying coverage for several illness types that it used to cover.
		B)	retrospective payments where providers were only reimbursed for costs incurred.
		C)	prospective payments where providers got a lump sum based on a patients illness regardless of actual expenses.
		D)	putting doctors on staff so patient must see a Medicare doctor who is paid a salary by the program.


7	In which part(s) of Medicare must a person over 65 enroll
		A)	Part A only
		B)	Part B only
		C)	Part A and Part B
		D)	Neither Part A or Part B is mandatory


8	Which of the following statements is true about Medicare Part B
		A)	The premiums are very low relative to what the elderly spend on doctor bills so nearly everyone who is eligible elects to subscribe to Part B.
		B)	Part B is mandatory.
		C)	The premiums are about in line with what the elderly spend on doctor bills so just over half of those eligible elect to subscribe to Part B.
		D)	The premiums are very high relative to what the elderly spend on doctor bills so nearly no one who is eligible elects to subscribe to Part B.


9	The out-of-pocket costs for Medicare Part A are
		A)	very high for the first day of coverage.
		B)	zero for the second through 61st day.
		C)	based on a strict percentage of total expenses.
		D)	a) and b)


10	The Intermediate estimates of the Medicare Trust Fund suggest that
		A)	it will run out in the year 2025.
		B)	it will have run out by the time you have read this.
		C)	it will run out in the year 2242.
		D)	it will never run out

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