Ch. 3 Exam: Medical Expense Insurance

Major Medical policies typically:

contain a deductible and coinsurance

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will:

continue coverage but exclude the heart condition

All of the following statements about Major Medical benefits are true, EXCEPT:

Benefits have no maximum limit

Which of the following types of health coverage frequently uses a deductible?

Major Medical policy

Which of these options can an individual use their medical flexible spending account to pay for?

Prescription drugs (Prescription drugs are an allowable expense when paid for by a medical flexible spending account.)

Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?

Restoration of used benefit

Basic Hospital and Surgical policy benefits are:

lower than the actual expenses incurred

J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay:

$3,600

An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?

$7,000 (In this situation, $5,000+20% of the remaining bill= $7,000)

This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:

Family maximum deductible

All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT

HRA is entirely funded by the employee

For which of the following expenses does a Basic Hospital policy pay?

Hospital room and board

The individual Health Insurance policy that offers the broadest protection is a(n) ________ _________ policy

Major Medical

In order to establish a Health Reimbursement Arrangement (HRA), it MUST:

be established by the employer

The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the:

initial deductible