It is currently 11 Dec 2017, 12:18

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Health insurance rates have been steadily increasing in this country f

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

5 KUDOS received
Manager
Manager
User avatar
Joined: 04 Aug 2013
Posts: 105

Kudos [?]: 246 [5], given: 56

Location: India
Schools: McCombs '17
GMAT 1: 670 Q47 V35
GPA: 3
WE: Manufacturing and Production (Pharmaceuticals and Biotech)
Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 03 Dec 2014, 10:34
5
This post received
KUDOS
29
This post was
BOOKMARKED
00:00
A
B
C
D
E

Difficulty:

  95% (hard)

Question Stats:

46% (01:56) correct 54% (01:55) wrong based on 661 sessions

HideShow timer Statistics

Health insurance rates have been steadily increasing in this country for decades. Though health insurance companies paid for a smaller percentage of claims last year than they did ten years ago, the overall rise in the number of claims still means that more money is being paid out, and the companies compensate for this by hiking their rates.

From the information above, it can be inferred that ten years ago

A fewer people made health insurance claims than was the case last year.
B the percentage of health insurance claims that were unpaid was less than last year's percentage.
C more claims were not paid by insurance companies than were not paid last year.
D health insurance companies paid a greater percentage of their claims than they paid twenty years ago.
E profits made by health insurance companies were similar to profits made by health insurance companies last year.
[Reveal] Spoiler: OA

Kudos [?]: 246 [5], given: 56

11 KUDOS received
Current Student
avatar
Joined: 02 Nov 2014
Posts: 30

Kudos [?]: 28 [11], given: 142

Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 04 Dec 2014, 01:35
11
This post received
KUDOS
3
This post was
BOOKMARKED
anceer wrote:
Health insurance rates have been steadily increasing in this country for decades. Though health insurance companies paid for a smaller percentage of claims last year than they did ten years ago, the overall rise in the number of claims still means that more money is being paid out, and the companies compensate for this by hiking their rates.

From the information above, it can be inferred that ten years ago

A fewer people made health insurance claims than was the case last year.
B the percentage of health insurance claims that were unpaid was less than last year's percentage.
C more claims were not paid by insurance companies than were not paid last year.
D health insurance companies paid a greater percentage of their claims than they paid twenty years ago.
E profits made by health insurance companies were similar to profits made by health insurance companies last year.


Okay let me first see what the argument over here has to say - Health insurance rates have been STEADILY INCREASING in this country FOR DECADES. Ok so for the past ten years, health insurance rates have been increasing. THOUGH, HIC paid for a SMALLER PERCENTAGE ( aah percentage...now percentage critical reasoning is fun..need to keep "smaller percentage in mind") of claims LAST YEAR than did ten years ago, (LAST YEAR<TEN YEARS ---> % of claims paid) The OVERALL RISE in the NUMBER of claims still means that MORE MONEY is being PAID out and the companies COMPENSATE for this by HIKING THEIR RATES.
This cr is an inference type has a lot to do with numbers. All the words that are capitalized are those which I have to be careful about..Now, let go one by one through each option.

A - hmm may be let me keep this aside
B - hey even this makes sense ...okay so we are discussing percentage... Last year say 30% was paid ---> this means ten years ago the % of claims paid > last yr---->so % of claims paid last year could be anywhere between 31-100% ( for simplicity purpose lets ignore the decimals)
So, 100%-30% = 70% unpaid last year and 100%-(31-100%) ..pick any number for ten years ago, result will be

% of unpaid claims ten years ago < % of unpaid claims last year.

hmm so I keep A and B as maybe

C- aah trick !!! we are speaking about percentage ..not numbers..this is definitely out..
D - twenty years ago ??? I really do not care about that.. What happened ten years ago - is what I really care about
E - no definitely out the argument doesn't even touch the topic of "profits" remotely.

hmm stuck between A and B ..B is a winner..but then A...
lemme go back to the argument ..aah "OVERALL RISE IN CLAIMS"

ok so last year, I claimed for both a tooth extraction and for an appendicitis operation..that makes it two claims from my side.
Or it could be that last year, I claimed for a tooth extraction and my friend claimed for an appendicitis operation.
So, basically from an "overall rise in number of claims" - I can't infer for sure that last year the number of people making a claim was greater than the number of people making a claim ten years ago..It could also be that this year the number of people making a claim has decreased or remained the same but the number of claims per person has increased.. Aah! Nice trick !!


Definitely A is out and B is in

Thus, B is the answer !! :)

Hope, my logic seems right. Let me know if you do not get it or do not agree with it.

Thanks.
Dr. Harshita.

Kudos [?]: 28 [11], given: 142

Intern
Intern
User avatar
Joined: 24 Sep 2012
Posts: 20

Kudos [?]: 8 [0], given: 6

Location: United States
WE: Project Management (Computer Software)
Re: Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 11 Feb 2015, 05:34
I think we can attack it in a simpler way :
Fact - paid Claim % 2014 < paid claim % 2004 hence unpaid claim % 2014 > unpaid claim %2004
Option B :-)

Kudos [?]: 8 [0], given: 6

4 KUDOS received
Intern
Intern
avatar
Joined: 11 Feb 2015
Posts: 5

Kudos [?]: 4 [4], given: 11

Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 11 Feb 2015, 10:34
4
This post received
KUDOS
Health insurance rates have been steadily increasing in this country for decades. Though health insurance companies paid for a smaller percentage of claims last year than they did ten years ago, the overall rise in the number of claims still means that more money is being paid out, and the companies compensate for this by hiking their rates.

Ok so this is an infer question. Be happy, here you don't need to look to the answer choices in order to find the answer! :wink:

First understood the meaning of a few things here:

Rates is the insurance fee that we customers have to pay in order to be insured.

Health insurance claims can be paid or not paid, depend on the mood of the insurance company (jk, but normally when you appeal for small claims, they will try to please you :P )

Important point: % paid + % not paid = 100%

=> The flow: Fee increases. The percent of claim that being paid last year is less than the percent of claim being paid 10 years ago. But number of claims increases so even if % of claims we paid is less, we still fork out more money because there are too many claims! We paid more money, so we have to get it back by increases our rate!

Now we back to the stem. What can be infer here? Notice the part I summarize above: "number of claims increases so even if % of claims we paid is less, we still fork out more money because there are too many claims! We paid more money, so we have to get it back by increases our rate!", this is a complete cause-effect example in GMAT, so from it we cannot infer any other information!

We left with "The percent of claim that being paid last year is less than the percent of claim being paid 10 years ago." Using the equation: % paid + % not paid = 100%, we know if % paid is less, % not paid is more! So last year the % not paid is more than 10 years ago, so on the other hand, the % not paid 10 years ago is less than % paid last year!

This is a classic GMAT logic. Remember, it is not about how many questions you do, it is what you learn and make out of the questions you got!

Kudos [?]: 4 [4], given: 11

Manager
Manager
avatar
Joined: 06 Jul 2011
Posts: 120

Kudos [?]: 119 [0], given: 240

Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 17 Apr 2015, 09:18
In the premise the Question states that - "the overall rise in the number of claims"

Can't we infer from that option (a) fewer people made health insurance claims than was the case last year.

~~~~~~~~~

Another approach -

10 yrs ago :-

Let number of claims made = x
Number of claims paid = 15% => .15x
unpaid claims = 0.85x

Last year: -

number of claims made = y
Number of claims paid = 10% => .10y [From the Q - health insurance companies paid for a smaller percentage of claims last year than they did ten years ago]
Unpaid claims = 0.90y

Also, From the Q - [ that more money is being paid out]

or 0.10y > 0.15x
which can only be possible when y>x or from the Q - [the overall rise in the number of claims]

which means that option (a) fewer people made health insurance claims than was the case last year. should be correct.

Where am I wrong?

Kudos [?]: 119 [0], given: 240

Non-Human User
User avatar
Joined: 01 Oct 2013
Posts: 10154

Kudos [?]: 275 [0], given: 0

Premium Member
Re: Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 20 May 2016, 07:39
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

Kudos [?]: 275 [0], given: 0

Manager
Manager
avatar
G
Joined: 07 Aug 2016
Posts: 98

Kudos [?]: 144 [0], given: 72

Location: India
Concentration: Marketing, Operations
GMAT 1: 690 Q48 V35
GPA: 4
WE: Engineering (Telecommunications)
Reviews Badge CAT Tests
Re: Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 28 Apr 2017, 00:22
Correct Answer: B

Explanation: The stimulus states that "...health insurance companies paid for a smaller percentage of claims last year than they did ten years ago." This means that the companies had a greater percentage of unpaid claims last year. Put another way, they had a smaller percentage of unpaid claims ten years ago, which is what choice B says. Choice A is incorrect because the number of people making claims is never mentioned. One person can make several claims, so we cannot draw any inferences about the number of people. C is wrong because the overall number of claims and the percentage of claims not paid were both lower ten years ago. Since they were both lower, their product (Total * Percentage) would also be lower, disproving the statement that more claims were not paid. Answer D is incorrect because we do not have any way of knowing the difference in the percentage of claims paid for these two periods (ten years ago versus twenty years ago). Answer E is incorrect since we already know that the companies have compensated for paying more real dollars by hiking their rates, but there are too many other factors involved in determining profit to make this comparison.

Kudos [?]: 144 [0], given: 72

Intern
Intern
avatar
B
Joined: 06 Jul 2011
Posts: 5

Kudos [?]: [0], given: 1

Re: Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 17 Aug 2017, 21:14
Doctorhm wrote:
anceer wrote:
Health insurance rates have been steadily increasing in this country for decades. Though health insurance companies paid for a smaller percentage of claims last year than they did ten years ago, the overall rise in the number of claims still means that more money is being paid out, and the companies compensate for this by hiking their rates.

From the information above, it can be inferred that ten years ago

A fewer people made health insurance claims than was the case last year.
B the percentage of health insurance claims that were unpaid was less than last year's percentage.
C more claims were not paid by insurance companies than were not paid last year.
D health insurance companies paid a greater percentage of their claims than they paid twenty years ago.
E profits made by health insurance companies were similar to profits made by health insurance companies last year.


Okay let me first see what the argument over here has to say - Health insurance rates have been STEADILY INCREASING in this country FOR DECADES. Ok so for the past ten years, health insurance rates have been increasing. THOUGH, HIC paid for a SMALLER PERCENTAGE ( aah percentage...now percentage critical reasoning is fun..need to keep "smaller percentage in mind") of claims LAST YEAR than did ten years ago, (LAST YEAR<TEN YEARS ---> % of claims paid) The OVERALL RISE in the NUMBER of claims still means that MORE MONEY is being PAID out and the companies COMPENSATE for this by HIKING THEIR RATES.
This cr is an inference type has a lot to do with numbers. All the words that are capitalized are those which I have to be careful about..Now, let go one by one through each option.

A - hmm may be let me keep this aside
B - hey even this makes sense ...okay so we are discussing percentage... Last year say 30% was paid ---> this means ten years ago the % of claims paid > last yr---->so % of claims paid last year could be anywhere between 31-100% ( for simplicity purpose lets ignore the decimals)
So, 100%-30% = 70% unpaid last year and 100%-(31-100%) ..pick any number for ten years ago, result will be

% of unpaid claims ten years ago < % of unpaid claims last year.

hmm so I keep A and B as maybe

C- aah trick !!! we are speaking about percentage ..not numbers..this is definitely out..
D - twenty years ago ??? I really do not care about that.. What happened ten years ago - is what I really care about
E - no definitely out the argument doesn't even touch the topic of "profits" remotely.

hmm stuck between A and B ..B is a winner..but then A...
lemme go back to the argument ..aah "OVERALL RISE IN CLAIMS"

ok so last year, I claimed for both a tooth extraction and for an appendicitis operation..that makes it two claims from my side.
Or it could be that last year, I claimed for a tooth extraction and my friend claimed for an appendicitis operation.
So, basically from an "overall rise in number of claims" - I can't infer for sure that last year the number of people making a claim was greater than the number of people making a claim ten years ago..It could also be that this year the number of people making a claim has decreased or remained the same but the number of claims per person has increased.. Aah! Nice trick !!


Definitely A is out and B is in

Thus, B is the answer !! :)

Hope, my logic seems right. Let me know if you do not get it or do not agree with it.

Thanks.
Dr. Harshita.


Its very unfortunate that this logic got correct answer. I am very confused with the way analysis is made.

Last year say 30% was paid ---> this means ten years ago the % of claims paid > last yr---->so % of claims paid last year could be anywhere between 31-100% ( for simplicity purpose lets ignore the decimals).

Is it not stating reverse of what is given? last year percentage of paid claims is SMALLER than % claims paid 10 years ago. Why is it assuming reverse? Am i missing something here?

Kudos [?]: [0], given: 1

Senior Manager
Senior Manager
User avatar
B
Joined: 08 Jun 2015
Posts: 339

Kudos [?]: 22 [0], given: 101

Location: India
GMAT 1: 640 Q48 V29
Re: Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 31 Oct 2017, 05:39
Awaiting OE please ... Kindly mention the source too ...
_________________

" The few , the fearless "

Kudos [?]: 22 [0], given: 101

Manager
Manager
avatar
S
Joined: 04 Apr 2015
Posts: 139

Kudos [?]: -21 [0], given: 56

Reviews Badge
Re: Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 31 Oct 2017, 06:38
Health insurance rates have been steadily increasing in this country for decades. Though health insurance companies paid for a smaller percentage of claims last year than they did ten years ago, the overall rise in the number of claims still means that more money is being paid out, and the companies compensate for this by hiking their rates.

we are given that health rates (premium ) is increasing , percentage no of claims settled were lower than the case in ten years ago , number of claims have risen (more money paid ) so companies increase their premiums

infer : must be true

looking at answer choices

A fewer people made health insurance claims than was the case last year. looks possible (hold )
B the percentage of health insurance claims that were unpaid was less than last year's percentage. looks possible(hold)
C more claims were not paid by insurance companies than were not paid last year. : we don't have any info about this as number of claims is not given (percentage is given)
D health insurance companies paid a greater percentage of their claims than they paid twenty years ago.:we don't have any info about this (what happened twenty years ago)
E profits made by health insurance companies were similar to profits made by health insurance companies last year.:we don't have any info about this (profits not mentioned)

considering A and B again
Now go for a condition when A can be not true : increase in number of claims doesn't always means no. of people have increased as one person can make multiple claims for various diseases :A option very cleverly does the trick of switching no of claims with the number of people so its not the correct choice

B is the correct answer :thumbup:

Kudos [?]: -21 [0], given: 56

VP
VP
avatar
S
Joined: 12 Dec 2016
Posts: 1327

Kudos [?]: 43 [0], given: 1337

Location: United States
GMAT 1: 700 Q49 V33
GPA: 3.64
GMAT ToolKit User Premium Member
Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 01 Nov 2017, 15:00
All options sound out of scope at the first glance.
The question stem is important in finding the right answer. This is a comparison between 10 years ago and last year => only B stands firm.

Kudos [?]: 43 [0], given: 1337

Director
Director
User avatar
P
Joined: 28 Mar 2017
Posts: 686

Kudos [?]: 161 [0], given: 138

Re: Health insurance rates have been steadily increasing in this country f [#permalink]

Show Tags

New post 02 Nov 2017, 13:22
Health insurance rates have been steadily increasing in this country for decades. Though health insurance companies paid for a smaller percentage of claims last year than they did ten years ago, the overall rise in the number of claims still means that more money is being paid out, and the companies compensate for this by hiking their rates.

From the information above, it can be inferred that ten years ago

A fewer people made health insurance claims than was the case last year. -We just know the percentages.
B the percentage of health insurance claims that were unpaid was less than last year's percentage. -Correct.
C more claims were not paid by insurance companies than were not paid last year. -We just know the percentages.
D health insurance companies paid a greater percentage of their claims than they paid twenty years ago. -Out of scope
E profits made by health insurance companies were similar to profits made by health insurance companies last year. -Out of scope.
_________________

Kudos if my post helps!

Helpful links:
1. e-GMAT's ALL SC Compilation
2. LSAT RC compilation
3. Actual LSAT CR collection by Broal
4. QOTD RC (Carcass)
5. Challange OG RC

Kudos [?]: 161 [0], given: 138

Re: Health insurance rates have been steadily increasing in this country f   [#permalink] 02 Nov 2017, 13:22
Display posts from previous: Sort by

Health insurance rates have been steadily increasing in this country f

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.