Deck 14: Health Care and Disability Insurance: Protecting Your Earning Capacity

Question 1

In the jargon of the insurance industry,"UCR" stands for

A)Urgent Care Reimbursement.
B)Usual Customary and Reasonable.
C)Usual Care Reimbursement.
D)Usual Customary and Responsible.

Answer 1

Usual Customary and Reasonable.

Question 2

"Comprehensive" health care insurance

A)covers all health care costs with no deductibles or copayments.
B)covers the entire family.
C)is sold only through group plans.
D)includes both basic health insurance and major medical insurance.

Answer 2

includes both basic health insurance and major medical insurance.

Question 3

Employer sponsored group health care insurance

A)is typically poor coverage requiring supplemental private insurance.
B)generally provides employees with no control over their health care coverage.
C)usually provides the employee with a choice of two or more health care alternatives.
D)is almost always entirely paid for through employee paid premiums.

Answer 3

usually provides the employee with a choice of two or more health care alternatives.

Question 4

"Basic health care" coverage consists of

A)hospital insurance,surgical insurance,and medical insurance.
B)hospital and accident insurance.
C)dreaded disease insurance.
D)heart and cancer insurance.

Question 5

A co-insurance clause is most likely included in

A)major medical coverage.
B)long-term care coverage.
C)dreaded disease coverage.
D)basic medical coverage.

Question 6

Hospital indemnity insurance

A)pays a fixed dollar amount for each day you remain in the hospital.
B)provides the provider of the service a direct payment up to a set daily maximum.
C)guarantees you certain specified services regardless of the daily cost.
D)guarantees you all hospital services regardless of cost.

Question 7

Which of the following forms of hospital insurance makes full and direct reimbursement to the provider of care for covered services?

A)Hospital expense insurance
B)Hospital indemnity insurance
C)Hospital service-benefit coverage
D)all of the above

Question 8

Those most likely to be without health insurance coverage are

A)under age 18.
B)between 18 and 24 years of age.
C)between 25 and 54 years of age.
D)between 55 and 64 years of age.
E)over 65 years of age.

Question 9

Comprehensive medical insurance is designed to

A)provide major protection against most medical expenses with a small deductible.
B)do the same as answer "A" above,but it also includes disability income protection.
C)provide protection against a comprehensive array of accidents and illnesses,but with relatively low coverage against any of them.
D)replace traditional insurance such as Blue Cross/Blue Shield.

Question 10

If the cost of an office visit is $50 and you have a $15 copayment under your health insurance coverage,your insurance will pay

A)$50.
B)$35.
C)$15.
D)$0.

Question 11

Under a typical private long term care policy

A)only skilled nursing care is covered.
B)only Medicare approved services are covered.
C)you are only covered if you can demonstrate you can no longer care for yourself.
D)your benefits begin whenever you decide you need to enter a nursing home.

Question 12

Under a traditional comprehensive health insurance,long-term care coverage typically includes

A)only custodial care.
B)only non-skilled nursing care.
C)only skilled nursing care.
D)all of the above

Question 13

"Major medical" coverage

A)is also known as first dollar coverage.
B)provides for insurance protection beyond basic health care coverage.
C)pays out only in the event of a catastrophic illness.
D)covers only hospital-related expenses.

Question 14

Over the past twenty years,the cost of medical care has

A)risen about twice as much as the average price of all other prices.
B)matched the rise in the average price of all other goods.
C)remained relatively constant.
D)steadily fallen because of technological advances in medical treatment.

Question 15

The hospital insurance preferred by the author is

A)indemnity insurance.
B)holistic insurance.
C)service-benefit insurance.
D)expense insurance.

Question 16

Which of the following statements is false?

A)More than half of private health care expenditures are covered by private insurance.
B)Over the past decade the cost of health care has risen twice as fast as other costs.
C)Most private health insurance is employment related.
D)The private cost of nursing home care is more likely to be covered by private insurance than prescription drugs.

Question 17

The term copayment means that

A)both the private insurer and the government will share the cost of the medical service.
B)both your private physician and the hospital providing the service must be reimbursed simultaneously.
C)both you and your insurer will share the cost of the medical service.
D)both you and your physician will receive reimbursement for the medical expenses.

Question 18

If the cost of an office visit is $30 and you have a $10 copayment under your health insurance coverage,then you pay

A)$40.
B)$30.
C)$20.
D)$10.

Question 19

Of the following coverage,the most important is

A)hospital insurance.
B)medical insurance.
C)basic health insurance.
D)major medical insurance.

Question 20

"Major medical" insurance typically includes

A)first-dollar coverage on all medical expenditures.
B)reimbursement for hospital expenses.
C)coverage for a restricted list of major injuries and illnesses.
D)extensive dollar coverage after health care expenses exceed significant deductibles.

Question 21

Specific disease and accident insurance policies are usually

A)good buys,providing specific coverage at a low cost.
B)expensive but desirable components of your health care coverage.
C)poor buys,duplicating coverage provided by more necessary comprehensive insurance.
D)recommended by financial planners for those with low incomes.

Question 22

Your choice of physician care will be greater if you join an HMO with

A)a group-staff arrangement.
B)an individual practice arrangement.
C)preferred provider arrangement.
D)an indemnification agreement.

Question 23

Workers' compensation programs are meant to help pay for medical expenses and lost income resulting from

A)work-related injuries,but not work-related illnesses.
B)work-related injuries and illnesses.
C)both work- and non-work-related injuries,but not illnesses.
D)both work- and non-work-related injuries and illnesses.

Question 24

You would probably choose an HMO over traditional insurance,if

A)you wanted only basic health care coverage.
B)you wanted more complete basic health care coverage.
C)you wanted better major medical coverage.
D)you liked to be pampered.

Question 25

The waiting period for health care insurance is the period between

A)when you apply for membership and when you are admitted into the plan.
B)when you pay your first premium and your plan coverage begins.
C)when you enter an insurance plan and when the costs of a pre-existing illness are covered.
D)when you incur a medical expense and you receive reimbursement for the expense.

Question 26

Cancer insurance

A)is high-cost insurance that makes little financial sense.
B)can fill an important gap in traditional health care coverage.
C)is specifically provided young adults under special provisions in the Medicare program.
D)should be supplemented by additional policies covering other major illnesses.

Question 27

In a managed health care program,

A)you put together your own health care network.
B)you are provided quality care at typically high cost.
C)your primary care physician serves as the gatekeeper to your health care network.
D)government regulations determine the provision of medical services.

Question 28

Under a traditional comprehensive health insurance,long-term health care coverage generally pays for

A)only skilled nursing care required by an illness or injury.
B)only skilled nursing care required by injury.
C)all nursing care including care which is primarily custodial.
D)only personal and custodial nursing care.

Question 29

The preexisting conditions clause in a health insurance policy

A)ensures that illness that occurred before coverage began will be covered by the policy.
B)ensures that injures that occurred before coverage began will be covered by the policy.
C)ensures that both illnesses and injuries that occurred before the coverage began will be covered by the policy.
D)excludes from coverage certain types of injuries and illnesses that began before the policy was issued.

Question 30

Dental insurance generally covers

A)only dental surgery.
B)the cost of preventive care with co-insurance on nonroutine dental work.
C)all dental care with little or no deductibles.
D)only nonpreventive dental care such as filling cavities.

Question 31

Which of following statements is false?

A)A preexisting conditions clause can make it easy for you to change insurers.
B)A coinsurance clause may require that you pay a specified percent of you medical expenses.
C)If your coverage is guaranteed renewable,your coverage will continue as long as you pay your premiums.
D)A comprehensive health insurance policy can limit the total amount paid out under the policy.

Question 32

A health maintenance organization (HMO)

A)is a provider of health care and not an insurer of health care.
B)is an insurer of health care and not a provider of health care.
C)is both an insurer and provider of health care.
D)functions as a middleman between the insurer and the provider of health care.

Question 33

An HMO typically covers

A)a portion of your medical expenses,the balance being covered by Blue Cross/Blue Shield.
B)all your medical expenses with the exception of certain deductibles.
C)both life and health insurance.
D)only specified illness and accidents.

Question 34

Under an Point of Service HMO

A)all employees must enroll after a preliminary waiting period.
B)all employees may enroll after a preliminary waiting period.
C)you may select non-HMO providers if you are willing to incur additional costs.
D)you may select non-HMO providers at no additional cost.

Question 35

Health services are provided by salaried physicians in

A)a group staff HMO.
B)an individual practice arrangement.
C)a PPO.
D)an FFS.

Question 36

Those insurance plans offering a preferred provider typically

A)do not provide any reimbursement for participants using non-PPO services.
B)provide partial reimbursement for participants using non-PPO services.
C)have been forced to provide full reimbursement for non-PPO services under state laws.
D)have been forced to provide full reimbursement for non-PPO services under the National Health Maintenance Act.

Question 37

Health insurance in which your family physician serves as the gatekeeper to additional health care services is called

A)hospice care.
B)fee-for-service care.
C)planned care.
D)managed care.

Question 38

Which of the following statements concerning HMOs is false?

A)HMO plans often provide extensive coverage of basic health care benefits.
B)Critics of HMOs argue that participating physicians may have a financial incentive to hold back medical care.
C)Hospital stays for patients of HMOs are longer than those with traditional health care insurance.
D)Those with larger families and younger children often find HMOs are more likely to financially prefer an HMO over traditional insurance.

Question 39

The health care coverage that provides you with the greatest choice of health care services is

A)manage care.
B)fee-for-service care.
C)HMO care.
D)PPO care.

Question 40

The Americans with Disabilities Act

A)requires business to accommodate disabled customers,but not disabled employees.
B)prohibits employers from discriminating against disabled workers.
C)prohibits health insurers from including pre-existing conditions clauses in policies.
D)allows employers to deny employment to individuals who are likely to file insurance claims.

Question 41

If you need individual coverage,a good way of holding down your insurance costs would be to

A)purchase only accident insurance.
B)purchase accident insurance supplemented by policies for specific catastrophic diseases such as cancer.
C)purchase a comprehensive health care policy.
D)purchase major medical insurance with high deductibles.

Question 42

In larger firms,COBRA requires that employers must offer terminating employees who cannot obtain alternative group insurance coverage

A)continued group insurance coverage that is convertible to individual coverage.
B)government sponsored health insurance.
C)an individual policy at termination.
D)counseling on how alternative coverage might be obtained individually.

Question 43

Disability income insurance typically provides the insured with

A)medical payments coverage.
B)protection against loss of income (typically at no more than 60-70% of current income).
C)protection against loss of income and complete medical insurance coverage.
D)protection against loss of income (typically at about 100% of current income).

Question 44

Federal rules governing the continuation of health care insurance after termination of employment

A)cover only the terminated employee.
B)cover only the terminated employee's dependents.
C)cover both the terminated employee and dependents.
D)have been ruled unconstitutional by the Supreme Court.

Question 45

Medigap insurance covers the gap

A)between basic and comprehensive health care.
B)between those services covered by Medicare and those that are not.
C)in Medicare insurance between early retirement age and normal retirement age.
D)between private insurance and government insurance.

Question 46

Social Security provides disability income to

A)everyone who is a citizen of the United States.
B)only covered workers.
C)only retired workers who once were covered workers and their families.
D)covered workers and their families.

Question 47

Which of the following statements concerning flexible spending accounts is false?

A)They are also known as cafeteria plans.
B)Unspent funds may be held over for subsequent years.
C)Employees may voluntarily contribute pretax dollars to this account.
D)Expenditures from the account are subject to IRS restrictions.

Question 48

A joint federal-state effort to cover medical expenses for the needy is known as

A)Medicaid.
B)Medicare.
C)Medigap.
D)Mediplan.

Question 49

A flexible spending health care account

A)permits you to increase premiums in order to purchase increased benefits.
B)automatically adjusts premiums to reflect changes in health care costs.
C)can pay for health insurance deductibles with pretax dollars.
D)is funded through employer contributions.

Question 50

To qualify for a health savings account (HSA)you must

A)have a high deductible health plan.
B)earn less than $49,000.
C)be self-employed.
D)be employed in the public sector.

Question 51

Which of following statements concerning health savings accounts (HSA)is incorrect?

A)Your contributions are tax deductible whether or not you itemize.
B)Employer contributions are not included in your gross income.
C)Amounts in the account at the end of the year are forfeited.
D)Funds in the account may be used as a source of retirement funds.

Question 52

Which of the following statements concerning the Medicare Prescription Drug Card is false?

A)It is subsidized by the federal government.
B)Coverage may be obtained through stand-alone prescription drug plans.
C)The card eliminates all deductibles on prescriptions.
D)Coverage may be obtained through a Medicare Advantage program.

Question 53

When choosing among health insurance plans,you should seriously consider only those that have adequate

A)policy limits and major medical coverage.
B)basic health care coverage.
C)dental coverage.
D)surgical care coverage.

Question 54

Which of the following statements concerning Medigap insurance is false?

A)All companies that sell Medigap insurance must sell at least a basic policy that addresses several gaps in Medicare insurance.
B)If you purchase a Medigap policy upon turning age 65,you cannot be turned down or charged extra because of your health status or medical condition.
C)Federal and state permission to sell Medigap policies does not indicate that the policies may be reasonably priced.
D)Medigap insurance is purchased from the federal government.

Question 55

Which of the following statements concerning the financial stability of health care insurers is false?

A)There has never been a financial collapse of a health insurance company.
B)Federally-qualified HMOs must carry insurance to cover the unpaid bills of patients in the event they become insolvent.
C)Private firms rate the financial stability of commercial health care insurers.
D)In many states commercial health insurers are protected by state guarantee funds.

Question 56

Which of the following statements concerning Medicare is false?

A)Medicare is a federally-sponsored health care insurance generally available to those over 65.
B)Medicare is free federally-sponsored insurance and does not require premium payments.
C)Medicare can cover specific illness,such as kidney failure,for those under age 65.
D)Medicare provides limited coverage for hospital stays and skilled nursing facilities.With extended stays you may be responsible for all costs.

Question 57

Defined contribution health plans

A)provide medical care insurance in retirement.
B)generally benefit older workers.
C)typically cover 100 percent of health insurance premiums.
D)provide a voucher or a set amount of money for you to purchase health insurance.

Question 58

When private disability benefits are integrated,they

A)continue until you receive Social Security retirement benefits.
B)begin immediately after the onset of the disability.
C)are tied to the cost of living.
D)are dependent on whether or not you qualify for Social Security disability benefits.

Question 59

About what percent of the work force is likely to have a Social Security insured disability before reaching age 65?

A)20 - 25%
B)40 - 50%
C)60 - 70%
D)80 - 90%

Question 60

According to Social Security regulations,you were not capable of substantial gainful employment

A)if you cannot earn more than an annually adjusted monthly minimum.
B)if you cannot earn at least 60% of what you earned in your pre-injury employment.
C)if you cannot earn at least 40% of what you earned in your pre-injury employment.
D)were unable to perform the main duties of any occupation you were fit for by training or experience.

Question 61

You may be eligible for Social Security disability income payments if you can demonstrate that

A)for a period of at least six months you will not be able to work in the occupation for which you were trained.
B)for a period of at least one year you will not be able to work in the occupation for which you were trained.
C)your disability is total and will last for at least a year or result in death.
D)your disability is total and permanent.

Question 62

If your disability coverage includes a social insurance substitute,then

A)cost of living increases in your Social Security benefits are offset by a reduction in your private benefits.
B)your disability benefits will be automatically adjusted for changes in the cost of living.
C)you may receive either private or public benefits but not both.
D)your private benefits will be greater if you do not qualify for Social Security disability benefits.

Question 63

The elimination or waiting period for disability income- protection is the time between

A)when you apply for membership and when you are admitted into the plan.
B)when you pay your first premium and when your plan coverage begins.
C)the onset of the disability and rehabilitation.
D)the onset of the disability and when coverage for lost income begins.

Question 64

The elderly are most likely to be without health care insurance.

Question 65

Workers' compensation laws

A)hold employers liable for all injuries on the job,regardless of who is at fault.
B)compensate workers for injuries on and off the job.
C)enforce national standards on employee reimbursement for medical expenses.
D)can force employers to pay unlimited amounts for pain and suffering.

Question 66

A "living will"

A)is also know as an irrevocable living trust.
B)automatically redirects assets to your beneficiaries as you age.
C)is a medical directive indicated the type of life support you wish to receive should you be incapacitated.
D)transfers your assets to your beneficiaries before you die in the event you become incapacitated.

Question 67

Which of the following statements concerning Social Security disability benefits is false?

A)Social Security benefits replace a smaller percentage of income as earnings increase.
B)To collect benefits you must be employed immediately preceding the onset of the disability.
C)Disability benefits may be payable to your spouse and dependent children.
D)If you return to work for a trial period you may be able to continue receiving Social Security benefits for a limited period.

Question 68

Comprehensive health insurance typically does not cover custodial care in a nursing home.

Question 69

The coordination of benefits clause in disability policies typically

A)sets a maximum on the disability benefits you may receive from all sources.
B)sets a minimum on the disability benefits you may receive from all sources.
C)attempts to time the benefits so that they are received when needed.
D)coordinates benefits from health care and disability income insurance so as to provide you with more complete protection against illness and injury.

Question 70

Insurance payments for third party services are called third party payments.

Question 71

Comprehensive health insurance reimburses 100 percent of covered services.

Question 72

Insurers reimburse a larger percentage of private dental services than private nursing care expenditures.

Question 73

Which of the following definitions of disability provides the best protection against a reduction in your income?

A)You are disabled if you cannot perform the main duties of your regular occupation.
B)You are disabled if you are unable to engage in any occupation for which you are suited by training and experience.
C)You are disabled if you cannot engage in any type of paid employment.
D)You are disabled if you are classified as disabled by the Security Administration.

Question 74

Comprehensive health care insurance includes both basic health care coverage and major medical coverage.

Question 75

A good method for holding down premiums on disability income protection is to

A)shorten the benefit period.
B)reduce the monthly benefit.
C)lengthen the elimination period.
D)look for generally available federally-subsidized coverage.

Question 76

Hospital indemnity insurance pays you a set daily amount regardless of your actual expenses.

Question 77

Private health insurance covers almost 75% of private health care expenditures.

Question 78

If your disability insurance policy is "class cancelable," then

A)the company may cancel any individual policy within the current group of insureds.
B)the company may cancel only a few high risk individual policies,but not the entire class of insureds.
C)the company can cancel an individual policy only if it cancels all policies written by the company.
D)the company can cancel an individual policy only if it cancels an entire class of insureds.The class need not consist of all policies written by the company.

Question 79

The preferred strategy for holding down the cost of disability income protection is to choose

A)a longer elimination period.
B)a shorter benefit period.
C)a less inclusive definition of disability.
D)a policy with an A+ rating.

Question 80

The most widely held form of health care coverage is employer-provided group insurance.