Chapter 15 - Medical Expense Insurance

A Health Reimbursement Arrangement MUST be established

By the employer

Dan has a major medical expense policy with a $200 deductible and an 80/20 coinsurance provision. He incurs covered medical expenses of $100 in November and $400 in January. Under the carryover provision, what will the insurer pay?

$240

Larry has a Major Medical Expense policy for his family with a $1,000 per family/per year deductible and an 80/20 coinsurance provision. If Larry's family files four claims of $400, $800, $100, and $700 in one year, how much will the insurance company pay?

$800

An individual is insured under a major medical plan with a $1,000,000 lifetime benefit. The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a $50,500 medical expense during the calendar year, what is the remaining lifetime benefit?

$960,000

How long is individual medical expense insurance normally written for?

1 year

Mary has a Health Savings Account (HSA). Distributions that she has made for anything other than qualified medical expenses are considered taxable and subject to a penalty of

20%

The major medical deductible carryover period normally applies to expenses incurred during the last ___ months of the plan year.

3

What is the MAXIMUM number of employees an employer may have for qualified medical savings accounts?

50 employees

What do limited accident and health policies normally cover?

A specific illness or event

A preferred provider plan and an indemnity plan are similar in what way?

Both pay on a fee-for-service basis

What are reasonable and customary charges for health insurance primarily based on?

Average charges within a geographic region

Which of these statements regarding Major Medical Expense insurance is NOT true?

Benefits are paid on a capitation basis

Which of the following is considered a limited accident and health plan?

Cancer Plan

A policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim?

Claim must be paid after proof of loss is received

Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis?

Claims can be sent directly to the insured

Chris has a single major medical contract which covers all medical expenses. His plan is considered to be

Comprehensive

Major medical plans typically exclude coverage for which of the following benefits?

Custodial care

The amount of a covered loss to be paid by the insured before a major medical expense policy begins to pay is called the

Deductible amount

A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for

Experimental and investigative services

Major Medical policies are typically characterized by which of the following?

Flat deductible

The "Use it or Lose it" rule applies to

Flexible Savings Accounts

A major medical expense plan typically includes coverage for hospital room and board. Which of the following is normally covered under the category "room and board"?

General nursing care

A medical fee schedule shows the amount an insurer will pay for a given procedure. This amount is considered to be the

Highest Amount Payable

What is covered under a limited accident and health insurance policy?

Limited perils and amounts

Which of these policies is considered to be a comprehensive health policy?

Major Medical

Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?

May reduce her benefits

Which statement is NOT true regarding health insurance policies that provide limited benefits?

Only persons under the age of 65 are eligible

Which of the following is NOT included as a hospice benefit under a major medical plan?

Rehabilitation

A major medical expense policy typically does NOT

Pay surgeon fees on a first-dollar basis

Which type of deductible must be satisfied again for each illness or accident in a major medical plan?

Per-cause

A pre-existing condition exclusion in an accident and health insurance policy pertains to

Prior health matters

Which of the following does medical expense insurance NOT typically cover?

Treatment in a government facility

In order to contribute to a Health Savings Account (HSA),

The applicant must be enrolled in a High Deductible Health Plan (HDHP)

Fee-for-service is a method of administering health insurance benefit payments in which

The cost of each service is scheduled