Ch. 16 - Medical Expense Insurance

Major Medical policies are typically characterized by which of the following?

a. corridor deductible

b. flat deductible

c. probationary period

d. first dollar coverage

A Health Reimbursement Arrangement MUST be established

a. with employee funding

b. with other employer-sponsored benefits plans

c. by the employer

d. only during specific open enrollment periods

Which of the following does medical expense insurance NOT typically cover?

a. x-rays

b. treatment in a government facility

c. hospitalization

d. diagnostic testing

Which of the following is considered a Limited accident and health plan?

a. HMO

b. PPO

c. cancer plan

d. major medical plan

What is covered under a limited accident and health insurance policy?

a. losses that occur only in limited occupations

b. limited pre-existing conditions

c. losses that occur only in limited age groups

d. limited perils and amounts

Which of these policies is considered to be comprehensive health policy?

a. major medical policy

b. surgical policy

c. limited benefit policy

d. health savings account

A preferred provider plan and an indemnity plan are similar in what way?

a. only select providers may be used

b. both pay on a fee-for-service basis

c. any provider may be used

d. both operate on a prepaid basis

What are reasonable and customary charges for health insurance primarily based on?

a. average charges as determined by the NAIC

b. average charges as determined by actuarial tables

c. average charges within a geographic region

d. average charges within the United States

A policyowner suffers a covered accident and health insurance loss on June 30, and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim?

a. insurer does not have to pay the claim

b. only a percentage of the claim will be paid

c. claim must be paid after proof of loss is received

d. claim will be denied

Larry has a Major Medical Expense policy for his family with a $1,000 per family/per year deductible and an 80/20 coinsurance provision. If Larry's family files four claims of $400, $800, $100, and $700 in one year, how much will the insurance company pay?

a. $500

b. $800

c. $1,000

d. $1,200

The major medical deductible carryover period normally applies to expenses incurred during the last months of the plan year.

a. five

b. four

c. three

d. two

Chris has a single major medical contract which covers all medical expenses. His plan is considered to be

a. comprehensive

b. supplemental

c. limited

d. basic

Which of these statements regarding Major Medical Expense insurance is NOT true?

a. Benefits are paid typically after the coinsurance provision has been satisfied

b. Policies normally have a high maximum benefit

c. Policies typically include a deductible

d. Benefits are paid on a capitation basis

What is the MAXIMUM number of employees an employer may have for qualified medical savings accounts?

a. 20 employees

b. 30 employees

c. 40 employees

d. 50 employees

A major medical expense policy typically does NOT

a. contain a deductible

b. have a high limit of coverage

c. contain a coinsurance provision

d. pay surgeon fees on a first-dollar basis

Dan has a major medical expense policy with a $200 deductible and an 80/20 coinsurance provision. He incurs covered medical expenses of $100 in November and $400 in January. Under the carryover provision, what will the insurer pay?

a. $200

b. $210

c. $220

d. $240

Major medical plans typically exclude coverage for which of the following benefits?

a. maternity care

b. custodial care

c. hospital room and board

d. surgeon's fees

Fee-for-service is a method of administering health insurance benefit payments in which

a. the insurer is reimbursed directly

b. the cost of each service is bundled into one payment

c. the cost of each service is scheduled

d. the insurer pays for services through a voucher system

How long is individual medical expense insurance normally written for?

a. 1 year

b. 2 years

c. 3 years

d. 4 years

An individual is insured under a major medical plan with a $1,000,000 lifetime benefit. The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a $50,500 medical expense during the calendar year, what is the remaining lifetime benefit?

a. $950,000

b. $960,000

c. $989,500

d. $1,000,000

Which of the following statements is true regarding accident and health insurance claims that reimbursed on an indemnity basis?

a. no proof of loss is needed

b. claims can be sent directly to the insured

c. claims are required to be sent to the health provider

d. no claim form is needed

Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?

a. will not affect the new contract at all

b. may increase her benefits

c. may reduce her benefits

d. will permanently exclude her from insurance coverage

Which type of deductible must be satisfied again for each illness or accident in a major medical plan?

a. specific-cause

b. per-cause

c. all-cause

d. comprehensive-cause

A pre-existing condition exclusion in an accident and health insurance policy pertains to

a. prior insurance coverage

b. prior financial matters

c. prior health matters

d. prior occupations

Which of the following is NOT included as a hospice benefit under a major medical plan?

a. home-based services

b. counseling

c. rehabilitation

d. pain management

Which statement is NOT true regarding health insurance policies that provide limited benefits?

a. only persons under the age of 65 are eligible

b. coverage may be limited to a specific dread disease, such as cancer

c. benefits may be paid on a reimbursement or indemnity basis

d. benefits may be paid on a reimbursement or indemnity basis

The amount of a covered loss to be paid by the insured before a major medical expense policy begins to pay is called the

a. out-of-pocket expense

b. coinsurance percentage

c. deductible amount

d. usual, customary, and reasonable charges

The "Use it or Lose it" rule applies to

a. Medical Savings Accounts

b. Health Savings Accounts

c. Health Reimbursement Accounts

d. Flexible Savings Accounts

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

a. hospital charges

b. physician fees

c. experimental and investigative services

d. nursing services

Mary has a Health Savings Account (HSA). Distributions that have been made for anything other than qualified medical expenses are considered taxable and subject to a penalty of

a. 10%

b. 20%

c. 30%

d. 50%

What do Limited accident and health policies normally cover?

a. a specific illness or event

b. a specific age group

c. a specific income group

d. a specific geographical location

In order to contribute to a Health Savings Account (HSA),

a. the applicant must have no sickness & accident coverage

b. the applicant must be enrolled in a High Deductible Health Plan (HDHP)

c. the applicant must be at least 55 years of age

d. the applicant must be at least 65 years of age

A major medical expense plan typically includes coverage for hospital room and board. Which of the following is normally covered under the category "room and board"?

a. surgeon's fee

b. diagnostic services

c. prescription medication

d. general nursing care

A medical fee schedule shows the amount an insurer will pay for a given procedure. This amount is considered to be the

a. negotiated amount payable

b. average amount payable

c. lowest amount payable

d. highest amount payable