Kogut's Managed Care Practice Test

What is the purpose of stop-loss in risk-sharing arrangements?

It sets a fixed premium regardless of claims. It reimburses claims above a predetermined threshold, limiting risk exposure. It standardizes provider payments. It provides partial subsidies to patients' premiums.

Correct Answer:

It reimburses claims above a predetermined threshold, limiting risk exposure.

Explanation:

Stop-loss acts as a safety net that limits financial risk from unusually high claims by reimbursing them only after a preset threshold is reached. In risk-sharing arrangements, this means the plan covers costs up to the threshold, and the stop-loss carrier pays the excess, preventing a few extreme claims from destabilizing budgets. This protection brings budgeting stability and makes participating in risk-sharing more feasible, especially for self-funded or pooled arrangements. It’s not about setting a fixed premium, standardizing provider payments, or subsidizing patients’ premiums.

Access more questions from this quiz

Continue to Kogut's Managed Care Practice Test for more practice questions and the full quiz experience.

Access More Questions