Chapter Exam - Medical Expense Insurance

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

initial deductible

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

prescription drugs

A major medical policy typically:

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

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 Providion

Which of the following statements BEST DESCRIBES the intent of a Coinsurance clause i a Major Medical policy?

Discourages over-utilization of the insurance coverage

This type of deductible provision waived 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 BEST describes dental care indemnity coverage?

Services are reimbursed after insurer receives the invoice

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 deductible X 80% = $1600)

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 deductible + 20% of remaining $8,000 bill)

Which of the following BEST describes a Hospital Indemnity policy?

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

A characteristic of Preferred Provider Organizations (PPOs) would be:

Discounted fees for the patient

For which if the following expenses does a Basic Hospital policy pay?

Hospital room and board

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

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

In order to establish a Health Reimbursement Arrangement (HRA), it MUST

be established by the employer

Major Medical policies typically:

contain a deductible and coinsurance

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