personal finance chapter 12

Private health insurance plans contain all of the following coverage except A) hospital insurance. B) nursing home insurance. C) physician insurance. D) surgical insurance.

B

the nation's largest health care insurer

Blue cross

Medicare is a government health insurance program for those over 65 years of age who can show need for financial assistance.

FALSE

Medigap insurance, intended to supplement Medicare, is sold and serviced by the federal government.

FALSE

Social Security is the easiest disability coverage to qualify for benefits.

FALSE

Technological advances are one of the things helping to keep the cost of health care from escalating further.

FALSE

A PPO health insurance plan allows individuals a better selection of health care providers, but is more expensive than an HMO.

TRUE

Beginning in 2014, health insurers will not be able to deny applicants based on pre-existing conditions.

TRUE

Certain federal regulations ensure that individuals can maintain continuous health care coverage.

TRUE

Compared to indemnity plans, managed health care plans impose more restrictions on the specific health care providers.

TRUE

Having money taken out of your paycheck and put in a flexible spending account is one of the ways you can avoid paying taxes on the amount you spend for health care expenses.

TRUE

In order remain eligible for protection under HIPAA, a person must maintain continuous enrollment in a health care plan.

TRUE

Most people obtain health insurance through group plans offered by employers.

TRUE

Usually plans such as dental insurance and vision insurance are good deals if they are offered through employers.

TRUE

You must have Parts A and B of Medicare in order to qualify for Part D.

TRUE

Since health insurance is expensive A) most employers pay for the entire cost as an employee benefit. B) employees are usually required to pay the entire cost of the insurance. C) the employer and employee typically share the cost of the health insurance. D) the government along with the employer helps to subsidize employee health insurance costs.

C

The cost of health care has risen dramatically in recent years due to all except A) people living longer and requiring attention for longer periods of time. B) the high cost of technology in health care. C) reduced litigation costs. D) the bureaucratic processes of reimbursement and claim handling.

C

The definition of disability can be defined as all of the following except A) you are unable to perform the duties required of your occupation. B) you cannot perform the duties of any job that fits your education and experience. C) you are unable to perform the duties of your job due to a work-related injury. D) you are unable to do your job for an initial period.

C

Under a discount on charge arrangement, the provider receives A) a flat fee. B) more than what it would normally charge for a particular service. C) less than what it would normally charge for a particular service. D) an amount equal to the charge for the service.

C

When considering an HMO or PPO, which of the following would you not consider regarding the cost of the plan? A) Monthly premiums B) Coinsurance C) Number of doctors accepting new patients D) Maximum out-of-pocket expenses per year

C

Which of the following is not true as it relates to the cost of health care? A) Fraudulent claims by patients and health care providers add to the cost. B) People are living longer and their health care costs are higher. C) Better claim handling and processing has helped reduce the cost of health care. D) Technology used in medicine is very expensive and has added to the cost.

C

Which of the following is true regarding Medicare? A) Eligibility for the plan is based on both need and age. B) The entire plan is free to qualified participants. C) Part of the program is optional and has a charge. D) Virtually all medical expenses are paid for those covered.

C

Which of the following statements regarding health insurance is not true? A) It limits your potential liabilities and ensures you will receive the necessary medical care. B) Health insurance is offered by private insurance companies and the government. C) There are many more options available for homeowner's insurance than for health insurance. D) Blue Cross and Blue Shield is the nation's largest health care insurer.

C

Because of COBRA, you can continue to remain covered by your employer's health insurance plan for one year after you stop working for your employer.

FALSE

Buying health insurance through employer-sponsored plans is somewhat more expensive than buying your own policy individually.

FALSE

Generally, disability income policies with shorter waiting periods have lower premiums.

FALSE

One of the problems with changing jobs is that you will immediately lose your health insurance and may not be able to get new insurance right away.

FALSE

Part D of Medicare represents a combination of Part A and Part B provided through private insurance companies.

FALSE

The managed health care plan with higher costs, but a greater choice of health care providers is the ________.

PPO

Basic health insurance policies and Medicare will not cover stays in nursing homes or assisted living centers for very long.

TRUE

covers health care expenses incurred by policyholders to limit their potential liabilities and ensure that they will receive the necessary medical care

health insurance

A(n) ________ plan requires that individuals pay health care providers and then put in a claim for reimbursement.

indemnity

the time from when you are disabled until you begin to receive disability income benefits

waiting period

Which statement regarding COBRA is true? A) The act applies to private firms and agencies of state government but not to federal government agencies. B) COBRA allows you to continue your health coverage for two years after you stop working. C) The act was passed in 2010. D) If you retire and are not yet eligible to receive Medicare, you are not covered by COBRA.

A

An arrangement in whish the preferred provider organization (PPO) pays the provider a specific sum for each day a patient is hospitalized is called a A) discount on charge arrangement. B) per diem rate arrangement. C) co-payment. D) flat-fee arrangement.

B

In purchasing disability insurance, you should consider all of the following except the A) waiting period. B) probationary period. C) length of the benefits. D) cost of the policy.

B

One disadvantage of a flexible spending account is A) the amount is not subject to federal, state, or local taxes. B) funds allocated to the account cannot be rolled over into the next year. C) funds are available to pay for out-of-pocket expenses. D) it allows you to budget for uncovered medical expenses.

B

Which of the following is an advantage of a PPO compared to an HMO? A) The premiums are lower. B) There are more choices of specialized health care providers. C) There are no out-of-pocket expenses. D) No approval is needed to see a specialist.

B

Which of the following is not a true statement? A) More than half of all individuals in the United States will need long-term care in some period during their life. B) Medicare covers most of the expenses associated with long-term care. C) The cost of an aide providing basic care at home can exceed $1,000 per week. D) For individuals who enter a nursing home, the cost is about $46,000 per year on average.

B

________ is the government program that provides health insurance to individuals who are 65 years of age or older. A) Medicaid B) Medicare C) HMO D) Blue Cross and Blue Shield

B

All of the following will lower the premium of long-term care insurance except A) having a longer waiting period before the policy goes into effect. B) having a higher stop-loss provision. C) waiting until you are retired to obtain the insurance. D) choosing to receive benefits for a limited period.

C

An account that allows employees to use pre-tax income to pay for medical expenses is a A) HMO. B) PPO. C) flexible spending account. D) medical savings account.

C

Disability income is A) taxed at the long-term capital gains rate. B) taxed as ordinary income. C) tax-free. D) taxed at the short-term capital gains rate.

C

Disability insurance would probably cost the most for which of the following people? A) A certified public accountant (CPA) B) An office worker C) A construction worker D) A telemarketer

C

If a person is diabetic and is applying for a new health care insurance policy, s/he might be most concerned with which of the following? A) Cancellation options B) Stop loss provision C) Preexisting conditions D) Deductible

C

Hospitals, doctors, and patients have enough incentive to make the most economical use of health care services.

FALSE

Patients receive a(n) ________ from the PPO that lists the total charges, the total amount owed to the provider, and the total amount billed to the patient. A) remittance advice B) statement of charges C) invoice D) explanation of benefits

D

Although indemnity plans are less flexible than managed care plans, they charge lower rates.

FALSE

The managed health care plan with the lowest premiums and also the least choice of health care providers is the ________.

HMO

a government program providing health care for those with low incomes or in need of public assistance

Medicaid

federal program that provides health care to those over 65 who qualify for Social Security benefits

Medicare

________ insurance is provided by private insurance companies to cover medical expenses that are not covered by Medicare.

Medigap

Compared to indemnity plans, what is an advantage of managed health care plans? A) You will have lower insurance premiums. B) There are no out-of-pocket expenses required. C) You have greater choices of health care providers. D) They are very efficient in their handling of paperwork.

A

Health insurance policies may provide coverage for all of the following except A) cosmetic surgery. B) rehabilitation. C) mental health. D) pregnancy.

A

Indemnity health care plans have A) more flexibility and choices than managed care plans. B) lower costs than managed care plans. C) fewer health care professionals to choose from compared to HMOs. D) less bill-related paperwork than other plans.

A

Long-term care policies A) commonly have an elimination period (waiting period) of between 60 and 90 days before the policies will begin to pay. B) are relatively inexpensive and are a good value for those over 60. C) are not adjusted for inflation, so care must be taken to estimate future costs. D) All of the above

A

Medicare basic coverage (Part A) covers A) hospital expenses, including surgeries. B) outpatient hospital care. C) physical therapy. D) All of the above.

A

Sources of disability income do not include A) federal disability insurance. B) individual disability insurance. C) employer disability insurance. D) insurance from Social Security.

A

Which of the following is not true regarding employer disability insurance? A) Disability benefits are provided for very long periods, usually up to 30 years. B) About half of all large and medium-sized firms offer an optional disability plan through an insurance company. C) The premiums charged through group plans are normally low. D) A typical disability policy covers about 60% of the employee's salary.

A

Which of the following is usually not offered as part of a benefits package to employees? A) Auto insurance B) Health insurance C) Retirement benefits D) Disability insurance

A

________ insurance serves as a backup for expenses not covered by basic health insurance. A) Excess hospitalization insurance B) Surgical expense insurance C) Major medical insurance D) Physician expense insurance

C

Additional types of insurance commonly offered through employers include A) dental insurance. B) fitness insurance. C) vision insurance. D) Both A and C

D

Regarding a flexible spending account, which of the following is not true? A) You may put a predetermined amount of your pre-tax salary in the account monthly. B) The money may be used throughout the year to pay medical or dental expenses tax-free. C) If you don't use the funds during the year, you lose them. D) Your employer will match your funds dollar-for-dollar.

D

The part of Medicare that provides coverage for prescription drugs is A) Part A. B) Part B. C) Part C. D) Part D.

D

Which act established provisions that require U.S. citizens to obtain health insurance? A) Medicaid B) Consolidated Omnibus Budget Reconciliation Act C) Health Insurance Portability and Accounting Act D) Affordable Care Act

D

Which of the following is not true regarding government regulations to allow individuals who change jobs to maintain health insurance coverage? A) You may continue your health insurance provided through an employer's plan for 18 months after you stop working for that employer. B) Even if you retire, you may continue coverage for 18 months unless you qualify for Medicare. C) If you change jobs, a new insurance company cannot deny you coverage based on your health, medical condition, previous claims, or disability. D) When changing jobs, you are allowed to stop and start health care plans whenever you need to and still be guaranteed insurance coverage by a new provider.

D

Which of the following statements about an HMO is not true? A) You will pay the same monthly premium whether you use the plan or not. B) You need to be referred to see a specialist or the HMO will not pay. C) Individuals usually pay a small fee for a visit to a physician or for a prescription. D) The health care providers are compensated on the basis of each visit by a patient.

D

Before you decide to take out an individual disability policy, you should consider all of the following except A) amount of home mortgage. B) cost of gasoline commuting to and from work. C) employer disability insurance policy. D) dividends received from stock portfolio.

B

Comparing auto insurance and health insurance, A) you have fewer options with health insurance than with auto insurance. B) both types of policies have deductibles. C) the government has very little involvement in either of these areas. D) All of the above

B

Indemnity health plans A) greatly restrict the choice of health care providers. B) require you to pay the doctor and then get reimbursed. C) require you to get approval to see a specialist. D) are the least expensive of all health care plans.

B

Regarding the definition of disability, A) it is the same for all disability policies. B) it varies from one disability policy to another. C) the same definition is used by the insurance industry and Social Security. D) the meaning can change over the life of your disability policy.

B

Which one of the following benefits is most often available through an employer? A) Disability insurance B) Health insurance C) Dental insurance D) Vision insurance

B

Disability insurance policies usually cover A) actual expenses incurred. B) a minimum dollar amount. C) a percentage of your income before you were disabled. D) Any of the above.

C

Regarding Medicaid, which of the following is true? A) It is a program totally funded and run by each state. B) It provides free unlimited health care for low income individuals and families. C) It is a federal program administered by each state. D) It is a program funded and run by the federal government.

C

Which of the following statements about the Medicare Prescription Drug Improvement and Modernization Act of 2003 is not true? A) Seniors may purchase various forms of coverage for prescription drugs. B) The act allows coverage for seniors and people with disabilities. C) Low-income seniors are subject to a $250 deductible. D) Individuals can establish a health-savings account.

C

Policy premiums for long-term care insurance are relatively low, even for those over 60 years old.

FALSE

Since most workers have employer-sponsored disability coverage and are also eligible for Social Security and worker's compensation, there is very little demand or need for individual disability insurance.

FALSE

The Affordable Care Act allows young adults to continue on a parent's health insurance plan until age 19.

FALSE

The best disability plans pay you if you are not able to work at any job, not just your regular job.

FALSE

One of the newest types of health care insurance is ________ insurance, which provides coverage to those in a nursing home, assisted living facility, or at home.

Long term care

Health care providers who are part of an HMO are paid a predetermined amount of compensation per month for each patient who participates in the plan.

TRUE

Health insurance protects net worth by minimizing the chance that you will have to reduce savings or incur debt when you require medical attention.

TRUE

In most HMOs, if a person sees a specialist without being referred by the primary care physician, the HMO will not pay for the treatment.

TRUE

Medicaid is health insurance for the poor and is administered by each state within certain broad federal requirements and guidelines.

TRUE

Which of the following statements is not true of disability insurance? A) You should have it even if you are retired and living on a pension. B) The amount of coverage should equal your disposable income. C) If you are self-employed you should have disability insurance. D) All of the above are true of disability insurance.

A