Chapter 14 -Medical Expense Insurance

26. 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

51. What will the ins. Co. pay once the stop-loss is exceeded on a Major Medical policy

100% of covered expenses

27. A characteristic of PPO would be:

Discounted fees

20. All of these are characteristics of a Health Reimbursement Arrangement (HRA) Except:

HRA is entirely funded by the employee

16. For which of the following expenses does a Basic Hospital policy pay

Hospital room and board

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

Hospital room and board

25. Which of the following situtions does a Critical Illness plan cover

Leukemia or Severe car accident.

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

Limits an insured out-of-pocket medical expenses.

17. Which of the following are NOT covered under Major Medical policies

Pain and suffering

5. Which of the following are NOT covered under Major Medical policies

Pain and suffering.

42. Which of these options can an individual use their medial flexible spending account to pay for

Prescription drugs

54. Which of the following costs would a basic Hospital/Surgical policy likely cover

Surgically removing a facial birthmark

10. Which of the following statements BEST defines usual, customary and reasonable (UCR) charges

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

33. Basic Medical Expense insurance:

has lower benefit limits than Major Medical Insurance.

53. A medical expense policy typically pays benefits:

immediately

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

initial deductible

48. Deductibles are used in health policies to lower the

overuse of medical services

62. Deductibles are used in health policies to lower:

overuse of medical services

13. When medical expenses reach a certain dollar amount, the insured is no longer responsible for sharing the cost of expenses. The insurance company then pays 100% of the covered expenses. This major medical policy provision is called:

stop-loss limit.

11. What do Major Medical policies typically cover

usual, customary and necessary expenses.

57. A Hospital/Surgical Expense policy was purchased for a family of 4 in March, 2013. The policy was issued with a $500 deductible and a limit of 4 deductibles per calendar year. Two claim were paid in Sept. 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 thi family's out-of-pocket medical expenses for 2013:

$1,000.

1. Nick has a Major Medical insurance policy with a $1,000 deductible, an 80% coinsurance clause, and a $1,500 stop-loss feature. He is hospitalized and incurs the following covered expenses: $10,000 hospital room and board, and $2,500 surgeon's fee. What is Nick responsible for paying?

$1,500 (Nick only responsible for the stop-loss feature)

63. 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

$1,600

29. 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?

$1,600 ($2200-$200 x80= $1,600

6. If an insured under a Major Medical insurance policy with a $200 deductible and an 80% coinsurance clause incurred the following covered expenses: Hospital room and board $2,000; surgeons fee $1500; How much would the policy pay?

$2,640 (2,000 + 1,500 = 3,500 -200 =3,300 x .8)

60. An insured covered by a group Major Medical lplan is hospitalized after sustaining injuries that resulted from an auto 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

$3,000

36. 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 a $11,000 in covered medical expenses:

$3,000.

12. 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:

$3,600. Note: $2,000 + 20% of the remaining bill = $3,600.

4. A.J. has a Major Medical insurance policy with $500 deductible and an 80% coinsurance clause. He incurs the following covered expenses under a recent hospitalization: $3,500 hospital room and board; $2,000 surgeon's fee. What will A.J.'s policy pay

$4,000. ($3,500 + 2,000= 5,500 - 500= 5,000 x 0.80)

24. An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if the total of $15,000 in covered medical expenses are incurred

$7,000 ($5,000 + 20% of the remaining bill =$7,000)

41. C was injured whild deep sea diving and requires a hospital stay. C has a Major Medical policy with 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2,000

$720

32. Which of the following BEST describes a Hospital Indemnity policy:

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

40. Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy

Discourages overutilizaiton of the ins. Coverage

55. For which of the following expenses does a Basic Hospital policy pay

Hospital room and board

47. Which of the following statements about HEALTH REIMBURSEMENT AGGANGEMENTS (HRA) IS CORRECT

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

56. Which of the following types of health coverage frequently uses a deductile

Major Medical policy

64. Comprehensive Major Medical policies usually combine:

Major Medical with Basic Hospital/Surgial coverage

50. Comprehensive Major Medical policies usually combine:

Major Medical with Basic Hospital/Surgical coverage

23. Basic Hospital and Surgical policy benefits are:

lower than the actual expense incurred

19. A major medical policy typically:

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

9. Which of the following services is NOT included under hospitalization expense coverage

surgical fees;

15. What will the insurance company pay once the stop-loss is exceeded on a Major Medical policy:

100% of covered expenses.

43. Which of the following phrase refers to the fees charged by a healthcare professional

Usual, customary and reasonable expenses

30. 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

46. N has a Majority Medical policy tht only pays portion of N's medical expenses. N is responsible for paying the remaining balance. The provision is known as

Co-insurance

8. Which of the following limits an insurance company's total exposure under a major medical policy

Maximum lifetime benefit and a coinsurance provision

58. 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 $2,000:

Ans not identified -- $720 or zero

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

Benefits have no maximum limit

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

DREAD DISEASE INSURANCE.

45. M is insured under a Basic Hospital/Surgical Expense policy. A physician perfors surgery on M. What determines the claim M is eligible for

Determined by the terms of the policy

59. A characteristic of Preferred Provider Organizations (PPO) would be:

Discounted fees for the patient

2. Paul has a major medical policy which begins with basic first dollar coverage that pays up to its limits, then he must pay a certain dollar amount of covered expenses before the major medical portion steps in. The dollar amount Paul must pay is called:

corridor deductible

44. Major Medical policies typically:

contain a deductible and co-insurance

61. Which of the following BEST describes a Hospital Indemnity policy

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

52. T was treated for an ailment 2 months prior to applying for a health ins. 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.

7. The individual Health Insurance policy that offers the broadest protection is a ___

Major Medical

49. 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

$3,600. ($2,000 + 20% of remaining bill =$3,600.

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

High deductible health plan

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

Initial deductible

3. Which of the following statements BEST describes dental care indemnity coverage

Services are reimbursed after insurer receives the invoice.

18. 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.

37. Which of the following statements BEST defines usual, customary and reasonable (UCR) charges

The maximum amt. Considered eligible for reimbursement by an ins. Co. under a health plan

22. 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, EXCEPT for:

experimental and investigative services.