Medical Expense Insurance

In Major Medical Expense policies, what is the intent of a Stop Loss provision?
-Limits an insurer’s premium increases
-Limits an insurer’s liability
-Limits an insured’s out-of-pocket medical expenses
-Limits an insured’s coverage for pre-existing conditions

limits an insured’s out-of-pocket medical expenses
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
-Surgically removing a facial birthmark
-Care given at a nursing home
-Treating a wound from a soldier injured at war
-Lost income caused by a hospital stay

surgically removing a facial birthmark
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
$2,020
$2,000
$100

$2,100
For which of the following expenses does a Basic Hospital policy pay?
Hospital room and board
Prescription medication
Surgical fees
Physician’s fees

hospital room and board
In order to establish a Health Reimbursement Arrangement (HRA), it MUST
-be offered in conjunction with other employer provided health benefits
-limit the benefits to prescription drugs only
-be established by the employer
-limit the amount of money the employee can contribute toward the account

be established by the employer
Which of the following situations does a Critical Illness plan cover?
Asthma
Leukemia
Alcohol rehabilitation
Severe car accident

leukemia
Basic Hospital and Surgical policy benefits are
lower than the actual expenses incurred
higher than the actual expenses incurred
normally subject to deductibles
normally subject to coinsurance

lower than the actual expenses
Which of these options can an individual use their medical flexible spending account to pay for?
Vitamins and supplements
Prescription drugs
Household expenditures
Cosmetic procedures

prescription drugs
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 request a corrected application
-deny coverage and increase premiums
-continue coverage but exclude the heart condition
-rescind the coverage and return the premiums

continue coverage but exclude the heart condition
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 deducitble?
Deferral provision
Carryover provision
Stop Loss provision
Corridor provision

carryover provision
Which of the following BEST desscribes a Hospital Indemnity policy?
-Coverage that reimburses an insured for surgeon expenses
-Coverage that pays a stated amount per day of a covered hospitalization
-Coverage that replaces lost income due to hospitalization
-Coverage that pays for hospital room and board

coverage that pays a stated amount per day of a covered hospitalization
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?
0
$3,000
$8,000
$11,000

$3,000
Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?
Discourages overutilization of the insurance coverage
Minimizes the need for deductibles
Discourages adverse selection
Minimizes the waiting period

discourages overutilitzation of the insurance coverage
Deductibles are used in health policies to lower
the incidents of fraud
the coinsurance amount
overuse of medical services
adverse selection

overuse of medical services
Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness?
Major Medical
Hospital Expense
Surgical Expense
Hospital Income

major medical
A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 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 this family’s out-of-pocket medical expenses for 2013?
$500
$1,000
$1,500
$2,000

$1,000
Which of the following phrases refers to the fees charged by a healthcare professional?
Deductible
Coinsurance
Usual, customary, and reasonable expenses
Hospital expense

usual, customary, and reasonable expenses
Which of the following types of health coverage frequently uses a deductible?
Major Medical policy
Basic Surgical policy
Basic Hospital policy
Worker’s Compensation

major medical policy
Which of the following individual health insurance policies will provide the broadest protection?
Hospital Expense
Surgical Expense
Major Medical
Limited Sickness

major medical
N has a Major Medical policy that only pays a portion of N’s medical expenses. N is responsible for paying the remaining balance. This provision is known as
Assignment of Benefits
Coinsurance
Indemnity
Co-deductible

coinsurance
S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a
Low-deductible health plan
Medicare Supplement
High-deductible health plan
Flexible savings plan

high-deductible health plan
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 $2000?
$0
$400
$720
$1,000

$720
Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?
-If the employee had a qualified medical leave from work, lost wages can be reimbursed
-If the employee paid for qualified medical expenses, the reimbursements may be tax-free
-Any unused amounts are added to employee’s gross income
-Health insurance premiums can be reimbursed to the employee

if the employer paid for qualified medical expenses, the reimbursements may be tax-free
With a Basic Medical Expense policy, what does the hospitalization expense cover?
hospital room and board
hospital administration expenses
surgeon’s fees
physician fees

hospital room and board
Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?
Employee funds the HRA entirely
Employer funds the HRA entirely
HRA’s can be offered with other health plans
HRA’s allow reimbursement for eligible medical expenses

employee funds the HRA entirely
Which of the following is NOT a limited benefit plan?
cancer policies
life insurance policies
dental policies
critical illness policies

life insurance policies
Which of the following services is NOT covered under a hospitalization expense policy?
daily room and board
surgeon’s fees
intensive care
miscellaneous expenses

surgeon’s fees
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
hospital charges
physician fees
experimental and investigative services
nursing services

experimental and investigative services
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
$1,600
$2,000
$3,600
$8,000

$3,600
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
MEWA
Blanket insurance
Dread disease insurance
Disability insurance

dread disease insurance
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 a total of $15,000 in covered medical expenses are incurred?
$2,000
$5,000
$7,000
$10,000

$7,000
Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?
-The maximum premium an insurer can charge for their health insurance based on geography
-The maximum amount an employer can contribute to a contributory health plan
-The maximum deductible an insured can be charged
-The maximum amount considered eligible for reimbursement by an insurance company under a health plan

the maximum amount considered eligible for reimbursement by an insurance company under a health plan
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
Claim payment is equal to physician’s actual charges
Claim payment is negotiated between physician and patient
Determined by the schedule of benefits from the hospital
Determined by the terms of the policy

determined by the terms of the policy
Basic Medical Expense insurance
normally has a deductible and coinsurance
covers an illness but not an accident
pays for lost wages while hospitalized
has lower benefit limits than Major Medical insurance

has lower benefit limits than major medical insurance
Which of the following medical expenses does Cancer insurance NOT cover?
Chemotherapy
Radiation treatment
Physician visit
Arthritis

arthritis
Comprehensive Major Medical policies usually combine
-Major Medical with Disability Income coverage
-Major Medical with Basic Hospital/Surgical coverage
-Basic Hospital/Surgical with Accidental coverage
-Basic/Hospital/Surgical with Disability Income coverage

major medical with basic hospital/surgical coverage
The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the
corridor deductible
initial deductible
stop-loss deductible
coinsurance deductible

initial deductible
A Health Reimbursement Arrangement MUST be established
with employee funding
with other employer-sponsored benefit plans
by the employer
only during specific open enrollment periods

by the employer
The phrase “This policy will only pay for a semi-private room” is an example of a(n)
maximum policy limit
internal limit
stop loss
participation percentage

internal limit
All of the following are limited benefit plans EXCEPT
cancer policies
life insurance policies
dental policies
critical illness policies

life insurance policies
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 require a higher deductible for any claims resulting from this condition
-Insurer is required to initially cover this pre-existing condition
-Insurer will permanently exclude the condition from the policy
-Insurer will likely treat as a pre-existing condition which may not be covered for one year

insurer will likely treat as a pre-existing condition which may not be covered for one year
Major Medical policies typically
pay 100% of covered expenses
contain a deductible and coinsurance
require use of in-network facilities only
do not contain a deductible and coinsurance

contain a deductible and coinsurance
A characteristic of Preferred Provider Organizations (PPOs) would be:
Discounted fees for the patient
Not allowed to see out-of-network physicians
Physicians are paid on a capitation basis
A primary care physician is required

discounted fees for the patient
All of the following statements about Major Medical benefits are true EXCEPT
-The deductible can be expressed as a fixed dollar amount
-The benefit period begins only after a specified amount of expenses have accrued
-Benefits are generally expressed as a percentage of eligible expenses
-Benefits have no maximum limit

benefits have no maximum limit
A major medical policy typically
-provides benefits for surgical expenses only, subject to policy limits
-contains more limitations than a Basic Hospital, Medical, or Surgical policy
-contains a 60-day Elimination period for losses due to accident
-provides benefits for reasonable and necessary medical expenses, subject to policy limits

provides benefits for reasonable and necessary medical expenses, subject to policy limits
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?
$2,000
$1,760
$1,600
$400

$1,600
Which of the following statements BEST describes dental care indemnity coverage?
Services are reimbursed before the insurer receives the invoice
Services are reimbursed after insurer receives the invoice
In-network dentists must always be used
Very limited list of providers

services are reimbursed after the insurer receives the invoice

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