Finn 1003 - Exam 2 Study Material (Ch.5-9)

79. All of the following are sources of disability income except

A. Worker's compensation B. Disability benefits from an employer C. Social security D. Private income insurance programs E. All of the above are sources of disability income.

36. The Health Insurance Portability and Accountability Act of 1996

A.Sets federal standards to ensure that workers would not lose their health insurance if they changed jobs

74. Jack needs comprehensive medical coverage, however, his income is quite low. What plan should he investigate?

C. Medicaid

76. A Medigap policy fills the gap between medical costs and payments from

C. Medicare

33. What is the primary purpose of medical expense insurance?

C. Pay medical costs for illness or injury.

45. Fran is interested in purchasing health insurance that limits the total out-of-pocket amount that she will have to pay. She should consider a

C. Stop-loss provision

52. Which of the following is TRUE about long-term care insurance?

C. The older you are when you enroll, the higher the annual premium.

83. Cameron, age 25, sustained a debilitating hand injury and was unable to perform his job as a viola player in the local orchestra for 45 days. His employer has a disability income insurance policy that pays 70 percent of take-home pay with an elimination period of 60 days and coverage to age 65. Given this information, which of the following is true for Cameron?

C.He will not be eligible for any disability income because his disability ended before the elimination period ended.

93. Georgia has a health insurance policy that includes a deductible of $750 and a coinsurance of 20 percent. If her total bill is $2,750, how much will her insurance pay?

E. $1600 The amount the insurance company will pay will be the total bill less the amount Georgia will pay. Her amount due = deductible + 20% * (total bill - deductible) = $750 + 20% * ($2,750 - $750) = $750 + 20% * $2000 = $750 + $400 = $1150. The amount the insurance company will pay = $2,750 - $1,150 = $1,600.

89. How many people in the United States do not have health insurance?

E. 48 million

37. Coordination of benefits (COB) applies to

E. Combining two insurance policies issued for a married couple

47. Miguel is concerned that the health insurance option he is considering plays upon unrealistic fears. He is most concerned about

E. Dread disease policy

44. The type of health insurance coverage that takes up where basic health insurance coverage leaves off is

E. Major medical expense

66. Yvonne's employer offers a health plan that has a group of doctors and hospitals that agree to provide specified medical services to members at prearranged fees. This health plan offers some flexibility since members can either visit a physician from a list or go to their own doctors. What kind of plan does her employer offer?

E. Preferred provider organization (PPO)

62. A quality health insurance plan should do all of the following except

E. Provide a lifetime maximum level of coverage of up to $50,000

54. A health insurance policy with this provision lists coverage in terms of services, not dollar amounts.

E. Service benefits

81. Katrina was injured in an accident at work. The benefits she will receive to cover part of her income will come from

E. Worker's compensation

34. Which of the following is correct?

E.Most medical expense plans reimburse an individual for hospital stays, doctors' visits and medications.

84. Which of the following is true about the elimination period?

E.Premiums for a plan with an elimination period of 90 days will be less than the premiums for a plan with an elimination period of 60 days.

38. Which of the following about individual health insurance policies is correct?

E.They are available for the self-employed or others who are dissatisfied with the coverage that their group plan provides.

24. A good disability income insurance plan will provide benefits if you cannot work at any job.

FALSE A good plan considers your regular job, not any job.

10. A health insurance policy that pays you back for actual expenses is called an indemnity policy.

FALSE A reimbursement policy pays you back for actual expenses.

31. Administrative costs in the United States consume half of the health care dollars spent.

FALSE Administrative costs consume nearly 26 percent of health care dollars.

15. A PPO is another name for an HMO.

FALSE An HMO is a different plan than a PPO.

16. An employer self-funded health plan requires a low level of financial assets.

FALSE An inadequate level of financial assets can mean financial trouble for a self-funded employer.

13. Blue Cross and Blue Shield are two types of HMOs.

FALSE Blue Cross and Blue Shield are statewide organizations that provide health insurance.

23. Disability income insurance covers your medical expenses when you are disabled.

FALSE Disability income provides regular cash income when you are disabled.

25. The financial problems caused by death are greater than those caused by disability.

FALSE Disabled persons lose their earning power but still have to meet living expenses. In addition, they often need to cover medical treatment and special care for their disabilities.

17. A Flexible Spending Account is funded by an employer.

FALSE Employees contribute pretax dollars to an FSA account. The employer manages it.

2. All group health insurance plans provide the same level of protection.

FALSE Group plans vary in the amount of protection they provide.

32. Health care costs have decreased because of aging baby boomers using fewer health care services.

FALSE Health care costs have increased because baby boomers use more health care services.

1. Health insurance is a form of protection that eases the financial burden people may experience as a result of someone's death.

FALSE Health insurance protects from the financial burden as a result of illness or injury.

27. The period before you can receive benefits in a disability plan is called the probationary period.

FALSE It is called the elimination period.

6. Long-term care insurance is used to pay for a stay in a nursing home but not for help at home.

FALSE Long-term care insurance covers both a stay in a nursing home as well as help at home with daily living activities.

22. Medicare is offered to certain low-income individuals and families.

FALSE Medicaid is offered to certain low-income individuals and families.

21. Medicare typically covers routine checkups.

FALSE Medicare excludes routine checkups, dental care, most immunizations, and more.

29. Disability income insurance policies are required to provide benefits for disabled policyholders until age 65.

FALSE Some policies are valid for only a few years; others are canceled when one turns 65, and others continue to pay for life.

30. The United States has the fifth highest per capita medical expenditures in the world.

FALSE The U.S. has the highest per capita medical expenditures of any country in the world.

8. The benefit limits provision identifies the minimum benefits that will be paid for days spent in the hospital.

FALSE The benefit limits provision identifies the maximum benefits.

7. The copayment provision deals with the amount that someone will pay for a bill such as 20 percent coinsurance

FALSE The copayment is a flat fee that is paid every time you receive a covered service.

12. Some policies consider the average fee for a service in a particular geographical area then use that amount to set a minimum payment for policyholders.

FALSE These 'reasonable and customary' charges are used to set the maximum coverage.

3. COBRA and The Health Insurance Portability and Accountability Act of 1007 have improved health insurance coverage options for individuals and families.

TRUE

4. Surgical expense coverage for health insurance includes surgeon's fees in a doctor's office.

TRUE

5. A deductible is the amount you must pay before benefits become payable by the insurance company.

TRUE

9. With a guaranteed renewable health insurance policy, the insurer is permitted to raise premiums for all members of a group.

TRUE

90. Which of the following is NOT correct?

B. Victims of accidents and crimes require less emergency medical services than in the past

51. This health insurance provision lets your insurer make direct payments to your doctor or hospital.

A. Assigned benefits

91. Which of the following activities is NOT a step being taken to reduce health care costs?

A. Community health education programs motivate people to take better care of themselves B. Physicians encourage patients to pay cash for routine medical care and lab tests C. Programs to review health care fees are available D.Community health planning can help achieve a better balance between health needs and health care resources E. All of the activities can reduce health care costs

46. Jenny wants health insurance that limits the amount that she must pay before the insurance starts paying benefits. She is concerned about a

A. Deductible

70. Anna contributes pre-tax dollars to an account managed by her employer for her health care expenses. If she does not spend all of her money by the end of the year, she may forfeit it. What kind of plan does she have?

A. FSA

85. Disability income insurance plans offer benefits

A. For only a few years B. Until age 65 C. For life D. All of the above are possibilities

65. Xavier's employer offers a health plan that stresses preventative services and covers routine immunizations and checkups, screening programs, and diagnostic tests. What kind of plan does his employer offer?

A. Health maintenance organization (HMO)

77. Medicaid covers

A. Lab services B. Skilled nursing and home health services C. Prescription drugs D. Eyeglasses E. All of the above

61. Brittany and Brandon are both charged $250 for an office visit to the same specialist. Brittany's reimbursement policy has a deductible of $300. Once she has met the deductible, the policy will cover the full cost of her visits. Brandon's indemnity policy will pay him $150, the maximum amount his plan provides for a visit to any specialist. Which of the following is correct?

B Brittany will pay more because she must pay the entire bill since she has not met her deductible while . Brandon will have part of his bill paid by his policy.

56. What is a typical copayment amount for individuals?

B. $15 - $25.

96. Sandy went to the doctor three times, each appointment cost $150. Her copayment was $20 per visit. How much was Sandy required to pay for her three visits?

B. $60 Each visit required a copayment of $20. Since she had three appointments, her total copay was 3 * $20 = $60.

68. Which of the following is most likely to use a health maintenance organization?

B. A family with teenagers who need annual check-ups for sports at school

57. A policy that pays you back for actual expenses is called

B. A reimbursement plan

48. Nancy is studying the health insurance plan options offered by her employer. She wants a policy that will have the insurance pay a percentage of her medical expenses. She should review the

B. Coinsurance

55. Which of the following is INCORRECT about dread disease policies?

B. Each policy covers a wide range of conditions

71. Monica's employer offers a health insurance plan with a very high deductible. In addition, her employer provides a fund for her to spend specifically on health care. What kind of plan does she have?

B. HRA

58. After you have reached a certain limit, the insurance company covers 100 percent of any additional cost. This is called

B. Out-of-pocket limit

43. The type of health insurance coverage that may cover a specific amount for an operation is

B. Surgical expense

95. Peter has a health insurance policy that includes a deductible of $1,000, a coinsurance of 20 percent and a stop-loss of $5,000. If his total bill is $25,000, how much will he pay?

C. $5,000 Peter will either pay the calculated amount using the deductible and coinsurance OR the stop-loss amount, whichever is lower. Peter's deductible = $1,000. His coinsurance = 20% * (total bill - deductible) = 20% * ($25,000 - $1,000) = 20% * $24,000 = $4,800. His total out-of-pocket = the deductible + coinsurance = $1,000 + $4,800 = $5,800. However, his stop- loss is $5,000. Therefore, the most Peter will pay is $5,000.

88. The average per employee cost for health care in 2008 was more than

C. $8,000

80. How much income is usually replaced with a private income insurance program for a disability?

C. 40 - 60 percent, with some plans paying up to 75 percent

35. Most people receive health insurance from

C. A plan offered by their employer

49. The insurance that helps pay extensive hospital, surgical, medical, and other bills with a low deductible is known as a

C. Comprehensive major medical policy

40. COBRA stands for

C. Consolidated Omnibus Budget Reconciliation Act

59. The set amount that you must pay toward medical expenses before the insurance company pays benefits is called

C. Deductible

72. Jacob is concerned that his out-of-pocket health care expenses will be quite high, so he is considering adding contributions to a tax-free account that he can use with his high-deductible policy to cover catastrophic expenses. What kind of plan does he have?

C. HSA

64. Blue Cross and Blue Shield are

C. Hospital and medical service plans

41. The type of health insurance coverage that pays for some or all of the costs of room and board is

C. Hospital expense

92. Georgia has a health insurance policy that includes a deductible of $750 and a coinsurance of 20 percent. If her total bill is $2,750, how much will she be required to pay?

D. $1150 Her amount due = deductible + 20 percent * (total bill - deductible) = $750 + 20% * ($2,750 - $750) = $750 + 20% * $2000 = $750 + $400 = $1150

94. Larry has a health insurance policy that includes a deductible of $1,000 and a coinsurance of 20 percent. If his total bill is $4,000, how much will his insurance pay?

D. $2,400

78. Which of the following is INCORRECT?

D. A bad disability policy pays you if you cannot work at your regular job. D - A GOOD policy pays you if cannot work at your regular job. A BAD policy will not pay unless you cannot work at any job.

39. Which of the following about individual health insurance policies is NOT correct?

D. All insurance companies that offer this type of policy are required to charge the same rates.

69. Who is most likely to use a home health care agency?

D. An elderly neighbor

87. Rising health costs are due to all except

D. Baby boomers using fewer health care services

86. If you are concerned that your disability insurer may try to cancel your coverage if your health becomes poor, you should look for a plan that offers

D. Guaranteed renewability

75. Medicare covers

D. Inpatient hospital care

60. A health insurance policy that will cover only a fixed amount of an expense is called

D. Internal limit

53. This health insurance provision sets limits on the amount of repayment for certain services.

D. Internal limits

63. Which of the following is NOT a private health care plan?

D. Medicare Medicare is a government plan.

73. Individuals over the age of 65 who are eligible for federal government health plan coverage may also be interested in purchasing

D. Medigap

50. Which of the following is NOT a type of health insurance available to individuals or employees?

D. Minor medical indemnity insurance

42. The type of health insurance coverage that may cover routine doctor visits, X-rays, and lab tests is

D. Physician expense

67. This type of plan combines features of HMOs and PPOs. It uses a network of participating physicians and medical professionals who have contracted to provide services for certain fees. What kind of plan does his employer offer?

D. Point-of-service plan

82. Mark was severely injured and expects to be unable to work for at least 12 months. Because of his injury, he should expect to be eligible for disability income from

D. Social Security

98. What is one difference between group health insurance and individual health insurance policies?

Group: usually employer sponsored; available from the group (employer). Individual: often used by the self-employed or those who are dissatisfied with their group plan; available directly from the company of one's choice.

100. Georgia has a health insurance policy that includes a deductible of $750 and a coinsurance of 20 percent. If her total bill is $2,750, how much will she be required to pay?

Her amount due = deductible + 20% * (total bill - deductible) = $750 + 20% * ($2,750 - $750) = $750 + 20% * $2000 = $750 + $400 = $1150

26. The definition for Disability is stricter for Social Security than for employer plans.

TRUE

97. Health insurance is an important type of protection for many people. What is the primary source of health insurance? What other options are available?

Most people who have health insurance are covered under group plans, typically these are employer sponsored. People who do not have access to an employer-sponsored group insurance plan because they are self- employed and those who are dissatisfied with their coverage may have individual health insurance plans. Individuals who had a group plan through their employer before they were laid off may be eligible to keep their coverage through COBRA.

28. A disability policy with a longer elimination period typically charges lower premiums than a policy with a short elimination period.

TRUE

99. Identify at least three types of health insurance policies.

Policies include: • Basic health insurance includes hospital expense, surgical expense, and physician expense coverage • Hospital indemnity policies are used as a supplement to basic health or major medical policies • Dental expense insurance • Vision care insurance • Dread disease policies • Long-term care insurance

11. A health insurance policy that pays you back for actual expenses is called a reimbursement policy.

TRUE

14. A PPO is a type of managed care plan.

TRUE

18. A Health Reimbursement Account is an employer-funded plan.

TRUE

19. FSAs, HRAs, and HSAs all provide tax advantages for health expenses.

TRUE

20. If you have Medicare Part A and Medicare Part B, you should not need Medicare Part C.

TRUE