Chapter 5

Which of the following is not a limited benefit plan?

life insurance policy

Basic Hospital and Surgical policy benefits are

lower than the actual expenses incurred

A catastrophic illness would be the best covered by which of the following health insurance plans?

major medical

Generally, how long is a benefit period for a Major Medical Expense Plan?

one year

Comprehensive major medical policies usually combine

Major Medical with Basic Hospital/Surgical coverage

The individual health insurance policy that offers the broadest protection is an __ policy

Major medical

Which of the following types of health coverage frequently úsese deductible?

Major medical policy

Which of the following situations does critical illness plan cover ?

leukemia

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?

Dread disease insurance

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

Which of the following statements about health reimbursement arrangements (HRA) is correct?

If the employee paid for qualified medical expenses, the reimbursements may be tax-free

Which of the following costs would a basic hospital/surgical policy likely covered?

Surgically removing a facial birthmark

In order to establish a health reimbursement arrangement (HRA) it must

be established by the employer

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

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

initial deductible

J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n)

internal limit

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

prescription drugs

Which of the following services is not included under hospitalization expense coverage?

surgical fees

Which of the following policy features allows an Insured to defer current health charges to the following year's deductible instead of the current year's deductible?

Carryover provision

Which of the following statements best describes the intent of coinsurance clause in a major medical policy?

Discourages overutilization of the insurance coverage

All of these characteristics of a health reimbursement arrangement (HRA) expect

HRA is entirely funded by the employee

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

High Deductible Health Plan

Which of the following statements best describe dental care indemnity coverage?

Services are reimbursed after insurer receives the invoice

A health reimbursement arrangement must be established

by the employer

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 this time?

Restoration of used benefit

A characteristic of preferred provider organization (PPOs) would be

Discounted fees for the patient

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?

$2,100.. 10100-100 equals 10000.. 10000 times 20% is 2000... 2000 plus 100 is 2100

An individual has a major medical policy with a $5000 deductible and an 80/20 coinsurance clause. How much will the insured have to pay if a total of $15000 in covered medical expenses are incurred?

$7000- 5000 plus 20% of the remaining bill. 15,000 times 20% equals 3,000... 3000-5000 equals 2000... 5000 plus 2000 equals 7000

This type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied

Common accident deductible

Major medical policy typically

Contain a deductible and coinsurance

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?

In this situation, $2,200 - $200 deductible x 80% = $1,600.

C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?

In this situation, $400 deductible + 20% of the remaining medical bill = $720.

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?

In this situation, the insured's maximum out-of-pocket expenses for 2013 would be $1,000.

T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition?

Insurer will likely treat as a pre-existing condition which may not be covered for one year

In Major Medical Expense policies, what is the intent of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?

The correct answer is "$3,000". In this situation, the insured is responsible for $1,000 deductible + 20% of the remaining bill = $3,000.. 11000-1000 is 10000... 10000 times 20% is 2000 and 2000 plus 1000 is 3000

Which of the following statements best defines usual, customary, and reasonable (UCR) charges?

The maximum amount considered eligible for reimbursement by an insurance company under a health plan

Which of the following phrases refers to the fees charged by a healthcare professional?

Usual, customary, and reasonable expenses

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

Determined by the terms of the policy

J's major medical policy has a $2000 deductible and an 80/20 coinsurance clause. If J is hospitalized and receives a bill for $10,000 has much would J pay?

3,600 - in this situation $2000 plus 20% of the remaining bill is 3,600

B's policy provides coverage on an in-hospital basis only and contains a limited daily room and board benefit. Which of these policies does B have?

Basic hospital

All of the following statements about Major medical benefits are true expect

Benefits have no maximum limit

A major medical policy typically contains a provision that requires the insurer to pay only a part of loss, while the balance is paid the insured. This provision is caled

Coinsurance

Which of the following best describes a hospital indemnity policy?

Coverage that pays a stated amount per day of a covered hospitalization

A comprehensive major medical health insurance policy contains an eligible expenses provision which identifies the types of health care services are typically covered expected for

Experimental and investigative services

Basic Medical Expense Insurance

has lower benefit limits than Major Medical insurance

For which of the following expenses does a basic hospital policy pay?

hospital room and board

Under a Basic Medical Expense policy, what does the hospitalization expense portion cover?

hospital room and board

Deductibles are used in health policies to lower

overuse of medical services

A major medical policy typically

provides benefits for reasonable and necessary medical expenses, subject to policy limits