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AHIP Exam AHM-520 Topic 6 Question 105 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 105
Topic #: 6
[All AHM-520 Questions]

For a given healthcare product, the Magnolia Health Plan has a premium of $80 PMPM and a unit variable cost of $30 PMPM. Fixed costs for this product are $30,000 per month. Magnolia can correctly calculate the break-even point for this product to be:

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Suggested Answer: C

Contribute your Thoughts:

Annamae
1 months ago
Haha, I bet the exam writers are trying to catch us with some tricky math here. Good thing we're all sharp-minded healthcare professionals, am I right?
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Graciela
3 days ago
C) 600 members
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Rosenda
13 days ago
B) 375 members
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Ria
22 days ago
A) 274 members
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Emily
2 months ago
Ah, I see what you mean, Carma. The break-even point is where total revenue equals total costs, so we need to set (PMPM revenue * members) = (PMPM variable cost * members) + fixed costs. Solving for members gives us the answer C. 600 members.
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Carma
2 months ago
Hmm, I'm not so sure. Shouldn't we be looking at the total revenue and total costs to find the break-even point? Let me double-check the calculations.
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Norah
2 months ago
I think the answer is B. 375 members. The fixed costs are $30,000 and the contribution margin per member is $50 ($80 PMPM - $30 PMPM), so the break-even point would be $30,000 / $50 = 375 members.
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Carol
23 days ago
That makes sense, the calculation checks out.
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Micaela
29 days ago
That makes sense, the contribution margin per member is $50.
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Sanda
1 months ago
I agree, the break-even point is indeed 375 members.
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Celia
1 months ago
I agree, the break-even point is 375 members.
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Sherill
2 months ago
But the fixed costs are $30,000, so I believe it's 274 members.
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Vicky
2 months ago
I disagree, I calculated it to be 375 members.
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Sherill
2 months ago
I think the break-even point is 274 members.
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