Certified Application Counselor Practice Test

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What does AV stand for in healthcare plans?

Applied Value
Actuarial Value
Assured Value
Actual Value

The correct answer is: Actuarial Value

In healthcare plans, AV stands for Actuarial Value. This term represents the percentage of total healthcare costs that a health insurance plan is expected to pay for a standard population. Actuarial Value provides a way to compare the overall generosity of different plans, reflecting how much of the costs are covered by the insurer versus how much is paid out of pocket by the insured. For example, a plan with a higher actuarial value will generally cover a greater share of medical expenses, meaning lower out-of-pocket costs for the policyholder. This is particularly important in understanding the relationship between premiums and the financial risk that patients will face when seeking care. Understanding actuarial value helps consumers make informed choices about which health plans best meet their needs and financial situations.