Chapter 3 (Medical Expense Insurance)

Major Medical policies typically:

contain a deductible and coinsurance

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 provision

A Major Medical policy typically contains a provision that requires the insurer to pay only part of a loss, while the balance is paid by the insured. This provision is called

Coinsurance

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

Determined by the terms of the policy

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

Discounted fees for the patient

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

Discourages overutilization of the insurance coverage

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

Dread disease insurance

Which of the following types of health coverage frequently uses a deductible?

Major Medical policy

Comprehensive Major Medical policies usually combine:

Major Medical with Basic Hospital/Surgical coverage

Basic Hospital and Surgical policy benefits are:

lower than the actual expenses incurred

Deductibles are used in health policies to lower:

overuse of medical services

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

leukemia

Which of the following is NOT a limited benefit plan?

life insurance policies

This type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied.

Common accident deductible

Which of the following BEST describes a Hospital Indemnity policy?

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

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

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy wa issued with a $500 deductible and a limit of four deductibles per calendar year. Two clains were paid September 2013, each incurring medical expenses in excess of the deductible. Two additional caims were filed in 2014, each in excess of the deductible amount as well. What would be this famiys cute pocket medical expenses for 2013?

$1,000

Generally, how long is a benefit period for a Major Medical Expense Plan?

1 year

This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:

Family maximum deductible

All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT

HRA is entirely funded by the employee

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

Hospital room and board

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?

In this situation, $2,200 - $200 deductible x 80% = $1,600.

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

Initial deductible

In Major Medical Expense policies, what is the objective of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses

The individual Health Insurance policy that offers the broadest protection is a(n) _________ policy

Major Medical

Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?

Restoration of used benefit

Which of the following costs would a Basic Hospital/Surgical policy likely cover?

Surgically removing a facial birthmark

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 $11,000 in covered medical expenses?

The correct answer is "$3,000". In this situation, the insured is responsible for $1,000 deductible + 20% of the remaining bill = $3,000.

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

Which of the following phrases refers to the fees charged by a healthcare professional?

Usual, customary, and reasonable expenses

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 covered, EXCEPT for:

experimental and investigative services