Personal Finance Chapter 9

Under the Patient Protection and Affordable Care Act of 2010, which of the following is NOT correct?

Employers must offer continuing coverage through COBRA for up to 24 months after you leave your job.

Anna contributes pretax 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?

FSA

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

Guaranteed renewability.

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?

HRA

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?

HSA

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% 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?

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

A provision in a health insurance policy that sets specific levels of repayment for certain services is called

Internal limit.

Individuals over the age of 65 who are eligible for medicare may also be interested in purchasing more coverage called

Medigap

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

Minor medical indemnity insurance

After you have reached a certain limit that you must pay for the deductible and coinsurance, the insurance company covers 100% of any additional cost. This is called

Out-of-pocket limit.

What is the primary purpose of medical expense insurance?

Pay actual medical costs for illness or injury.

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?

Preferred provider organization (PPO)

Which of the following is true about an elimination period?

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

A health insurance plan should include all of the following "must-haves" except

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

The Health Insurance Portability and Accountability Act of 1996

Sets federal standards to ensure that workers do not lose their health insurance if they change jobs.

Mark was severely injured while on vacation 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

Social Security

Blue Cross and Blue Shield are

Statewide organizations

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

Stop-loss provision.

The type of health insurance coverage that may specify the maximum payment amount for each type of operation is

Surgical expense.

What is a typical copayment amount for individuals?

$20-30

How much does a private income insurance program pay for loss of normal income from a disability?

40-60%, with some plans paying up to 75%

A policy that pays you back for actual expenses is called

A reimbursement plan.

In which circumstances may the right to elect continued coverage under COBRA exist for a covered spouse or dependent?

A. Divorce. B. Legal separation. C. Loss of dependent child status. D. The covered employee's death. E. All of these.

The duration of benefits for a disability income insurance plan can be

A. For only a few years. B. Until age 65. C. For life.

Which of the following is correct about your health plan's summary plan description?

A. It contains information about the coverage of dependents. B. It contains information about what services will require a co-pay. C. It contains information about circumstances when your employer can terminate your health plan benefits. D. All of these are correct.

Rising health costs are due to all of the following except

Baby boomers using fewer health care services.

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?

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.

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 after she meets her deductible. She should review the

Coinsurance.

Coordination of benefits (COB) provision applies to

Combining the benefits of two insurance policies issued for a married couple.

The insurance that helps pay hospital, surgical, medical, and other bills with a low deductible is known as a(n)

Comprehensive major medical policy.

COBRA stands for

Consolidated Omnibus Budget Reconciliation Act

Jenny wants health insurance that sets the amount that she must pay toward medical expenses before the insurance starts paying benefits. She is concerned about a

Deductible.

Which of the following is INCORRECT about dread disease policies?

Each policy covers a wide range of conditions.

Which of the following is correct?

Health insurance plans may reimburse an individual for hospital stays, doctors' visits, and medications.

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

Health maintenance organization (HMO)

The type of health insurance coverage that pays for some or all of the daily costs of room and board during a hospital stay is

Hospital expense.

Medicare (Part A) covers

Inpatient hospital care

This health insurance provision sets specific levels of repayment for certain services.

Internal limits

Medicaid covers

Lab services, Skilled nursing and home health services, Prescription drugs, Eyeglasses.

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

Major medical expense.

Jack needs comprehensive medical coverage. However, his income is very low. What plan should he investigate?

Medicaid

A Medigap policy fills the gap between medicare payments and medical costs not covered by

Medicare

Which of the following is a government health care program?

Medicare

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

Physician expense.

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.

Point-of-service (POS) plan

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

Service benefits

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

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

Most people receive health insurance under a group plan from

Their employer.

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

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

Which of the following is NOT correct regarding why Health Care costs so much?

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

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

Worker's compensation.

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

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

All of the following are sources of disability income except

All of these are sources of disability income.

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

An elderly neighbor.

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

Assigned benefits

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

Deductible.

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

Dread disease policy