(Health) 3 - Medical Expense Insurance

Deductibles are used in health policies to lower

One of the primary reasons for using deductibles in health policies is to reduce the overuse of medical services.

A Health Reimbursement Arrangement MUST be established

HRAs are employer-established benefit plans that must be funded by the employer.

Which of the following situations does a Critical Illness plan cover?

Leukemia is a type of cancer and would be covered under a Critical Illness plan.

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

Major Medical benefits normally have a maximum limit.

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 deducitble?

The Carryover provision permits expenses incurred during the last three months of the calendar year to be carried over into the new year if needed to satisfy the deductible for the next year.

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

The correct answer is "$3,600". In this situation, $2,000 + 20% of the remaining bill = $3,600.

Which of the following statements BEST describes dental care indemnity coverage?

The correct answer is "Services are reimbursed after insurer receives the invoice". Dental care indemnity plans reimburse services only after the carrier receives the bill.

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

The correct answer is "hospital room and board". The hospitalization expense of a Basic Medical Expense policy pays for hospital room and board.

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as

The provision in a Major Medical policy that requires the insurance company pay only part of a loss and the insured to pay the balance is known as coinsurance.

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

To be eligible for a Health Savings Account, an individual must be covered by a high-deductible health plan (HDHP), must not be covered by other health insurance (does not apply to accident insurance, disability, dental care, vision care, long-term care), must not be eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.