Deck 22: Social Security

Question 1

Social Security became law in:

A)1920
B)1929
C)1935
D)1945

Answer 1

C

Question 2

The Primary Insurance Amount (PIA)in Social Security:

A)determines your hospital benefits
B)determines your supplementary medical benefits
C)is based on an average indexed monthly earnings calculation
D)determines your eligibility for benefits

Answer 2

C

Question 3

Which one of the following is not a characteristic of Social Security?

A)benefits are individually selectable by the covered individual
B)participation is compulsory
C)it can operate on a pay as you go basis with no prefunding
D)legislative activity may change the benefits

Answer 3

A

Question 4

Social security benefits are:

A)provided on a current-income basis
B)actuarially reserved
C)welfare assistance
D)not funded by general tax revenues

Question 5

Social Security is financed by a tax on:

A)employees and employers
B)only on employees
C)only on employers
D)all residents of the United States

Question 6

Which of the following is false concerning the operation of the Social Security system?

A)the program is operated on a pay as you go basis
B)employees and employers share the burden of funding the system
C)self employed individuals pay approximately 15.3 percent on their own payroll
D)there are no investment earnings since the program is operated on a pay as you go basis

Question 7

Which of the following benefits is not provided under the Social Security program?

A)survivor benefits
B)disability benefits
C)retirement benefits
D)welfare payments to poor people

Question 8

The Social Security black-out period occurs between the time:

A)the insured worker retires and the time retirement benefits begin
B)survivor benefits end and the time retirement benefits begin
C)the insured worker becomes disabled and the time disability benefits begin
D)a disabled worker recovers from disability and the time he/she is able to earn 100% of his/her pre-disability wages

Question 9

Which of the following does not influence the amount of a retiree's Social Security retirement benefits?

A)amount of covered earnings for each year of included work
B)number of years after a person's 21st birthday until the year before a death, disability, or retirement
C)annual amount of non wage income over the years calculated in the AIME
D)maximum earnings amount subject to the tax

Question 10

Social Security survivor benefits cannot be paid to:

A)husbands of deceased workers
B)wives of deceased workers
C)children of deceased workers
D)nonprofit charities

Question 11

Social security tax applies only until an annual covered maximum wage is reached. What was that wage in 2006?

A)$84,600
B)$90,400
C)$94,200
D)$99,000

Question 12

The "earnings test" ___________.

A)reduces Social Security survivor benefits if wage income exceeds an annually indexed amount
B)reduces Medicare benefits if Social Security benefits exceed an annually indexed amount
C)requires retired people to show a financial need before benefits are paid
D)reduces Social Security benefits if earned wages exceed an annually-indexed amount

Question 13

To have one quarter of coverage in the Social Security program,you must have:

A)worked 3 months
B)worked 4 months
C)earned a certain amount of covered income
D)been retired at least 3 months

Question 14

To receive Social Security retirement benefits one must be:

A)fully insured and of retirement age
B)currently insured and of retirement age
C)fully insured and meet the definition of disability
D)in financial need

Question 15

Which of the following is not a characteristic of a public assistance program benefits?

A)based on demonstrated need
B)subject to change
C)fully funded
D)funded by general taxes

Question 16

Which of the following groups would not be covered by Social Security?

A)doctors in private practice
B)professional athletes
C)coal miners
D)certain exempt state employees

Question 17

Medicare covers all the following except:

A)95% of the cost of all outpatient prescriptions
B)operating room costs
C)payment for doctor bills
D)outpatient therapy

Question 18

Alice dies and is survived by her husband,Steve,and their child,Dawn. Steve and Dawn are each then eligible to receive a monthly Social Security survivor benefit of $1,700. If Steve goes to work and earns $100 more than the maximum monthly earnings limit,what will happen?

A)Steves $1,700 benefit payment will cease
B)Both Steves and Dawns $1,700 benefit payment will cease
C)Steve's benefit payment will be reduced to $1,650
D)Both Steves and Dawns monthly benefits will be reduced to $1,650 each

Question 19

Social Security's definition of "disability" is:

A)losing at least an arm, a leg, sight in one eye, or any combination of these
B)inability to engage in any gainful employment due to a work related accident, and that inability must be expected to last for a continuous period of not less than twelve months
C)the inability to engage in one's own occupation for a continuous period of not less than twelve months
D)the inability to engage in any substantial gainful activity by reasons of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve months

Question 20

Each of the following is a Social Security benefit except:

A)retirement
B)unemployment
C)survivor
D)disability

Question 21

Both Parts A and D of the Medicare program are compulsory.

Question 22

Suppose that Social Security measures a quarter of coverage earned as $900. Mario works during the June and July only and earns $9,000 of covered wages. How many quarters of coverage does he receive for that year?

A)1
B)4
C)10
D)up to 10, depending upon whether or not he is self-employed

Question 23

The 2006 report from the trustees of Social Security indicates that:

A)Social Security will be bankrupt by the year 2040
B)With no changes to the program, all benefits will be fully-funded through the year 2040
C)Baby Boomers are specifically responsible for bankrupting the system
D)With no changes to the program, all benefits will be fully-funded through the year 2047

Question 24

Managed care options available through Medicare:

A)are mandated for all Medicare participants
B)result in lower out-of-pocket costs for participants
C)are prohibitively expensive for many participants
D)both a & b

Question 25

Members of the U.S.Army are covered by the Social Security program.

Question 26

Mr.Smalley is a retiree on the Medicare prescription drug plan. This year his drug expenditures are $250. What percentage will Medicare pay of the $250?

A)0
B)75
C)95
D)none of the above

Question 27

After 40 quarters in covered employment a person achieves "fully insured" status,and may receive Social Security benefits even if he or she never works again.

Question 28

There is no provision to coordinate benefits received under Social Security and Workers' compensation.

Question 29

Mr.Smalley is a retiree on the Medicare prescription drug plan. This year his drug expenditures are $5,100. What percentage will Medicare pay of the medications that cost between $2,250 and $5,100?

A)0
B)75
C)95
D)none of the above

Question 30

Only "currently insured" workers are entitled to a Social Security retirement benefit.

Question 31

Self-employed people:

A)are exempt from Social Security
B)must pay in 15.3% of their earnings in Social Security taxes
C)are not eligible for Social Security
D)must pay in 7.65% of their earnings in Social Security taxes

Question 32

The "retirement test" reduces Social Security benefits if there is non?wage (for example,dividend or interest)income in excess of about $6,000.

Question 33

Survivor benefits may be paid to both the widow and dependent children of a deceased worker.

Question 34

Social Security eligibility is based on how many __________ are earned.

A)years of full-time employment
B)total dollars
C)quarters of coverage
D)units of insurance

Question 35

Many HMOs have not enjoyed providing managed care for Medicare because:

A)the reimbursement schedule is inadequate or unattractive
B)they object to being forced to participate in the program
C)older patients are typically unprofitable for all insurers and health care providers
D)both a and b

Question 36

A surviving wife's Social Security benefit ends when her youngest child reaches age 16.

Question 37

The Social Security normal retirement age for a person born in 1970 is 65.

Question 38

The decision to enroll in the Medicare prescription drug plan requires:

A)very little information, because it's best for 75% of all Americans
B)a lot of information about the income tax bracket of the individual participant
C)an analysis of the individual's prescriptions and their costs
D)a brain surgeon

Question 39

Medicare's prescription drug plan:

A)has a $50 deductible
B)may negotiate with pharmaceutical companies to get lower medication prices
C)must, by law, negotiate with pharmaceutical companies to get lower medication prices
D)costs $35 per month

Question 40

Mr.Smalley is a retiree on the Medicare prescription drug plan. This year his drug expenditures are $15,100. What percentage will Medicare pay of the medications that cost between $8,000 and $15,100?

A)0
B)75
C)95
D)none of the above

Question 41

Explain what the dramatic shift was in political philosophy leading to the Social Security Act of 1935.

Question 42

The private insurance system and the Social Security system are both "fully-funded."

Question 43

The eligibility test for Social Security is known as the "needs" test.

Question 44

Social Security operates on the basis of pooling exposures and predicting losses in advance.

Question 45

Self?employed people must participate in the Social Security program.

Question 46

What are the requirements for receiving Social Security disability benefits?

Question 47

Explain what is meant by a "blackout period" as it applies to Social Security benefits.

Question 48

Describe the characteristics of a government insurance program.

Question 49

Medicare has three coverage parts;one part is mandatory,the other two are optional.

Question 50

There will soon be a drastic decline in the number of persons receiving Social Security disability benefits.