Do you understand the workings of health insurance in the United States?

This assignment will give you an opportunity to demonstrate the knowledge acquired so far.

Please respond to all of the questions below in a word document. Be sure to address all parts of each question.

Grading Criteria: Each correct and complete response is worth 20 points. Make sure to type the questions and the answers in order.  Each question requires a minimum of 2 full paragraphs ( 4-6 sentences) to be considered a complete response.   All parts of the question must be addressed to receive full points.

**Absolutely no AI tools or citations are permitted for this assignment.  Answers should be in your own words with a similarity score of 0 (excluding the retyped questions) for both the similarity and AI score. Similarity scores are visible immediately for the student.  The AI score is only visible to the Professor.  **

1. Why were the first health insurance organizations formed in America? What were the original driving factors? Describe the early growth of health insurance in the US.  
2. Explain the theory of insurance, by specifically addressing the degree of risk aversion, the size of the potential loss, and the "wealth effect".
3. What is meant by the "HMO Effect" versus "Favorable Selection" in managed care? Describe the evidence of an HMO Effect, and the evidence of Favorable Selection.
4. What are deductibles? Why are they so important in US health insurance models? How do changes in deductibles impact utilization and clinical decision-making.
5. Discuss the Utilization Management function in managed care, including Preadmission Certification and Concurrent Review of services.
6. Discuss the emerging role of Disease Management (DM) and Intensive Case Management in American managed care. How does DM actually work?
7. A key concept of health insurance is premium sensitivity. Describe the general process for premium computations in US healthcare insurance. Briefly explain employee premium sensitivity and how do employees typically respond to changes in health insurance premiums?
8. Describe the commonly used approaches to "underwriting" for healthcare services.
9. Do hospitals actually have "monopoly power" today? Why or why not?
10. Explain risk adjustment in the Affordable Care Act. How well does this approach work in your view?