Deck 9: Insuring Your Health

Question 1

If your employer offers access to a group health insurance plan,you may still be better off going with an individual policy.

Answer 1

True

Question 2

Typically group health insurance plans provide substantially less comprehensive coverage than the average individually underwritten policy.

Answer 2

False

Question 3

Supplementary medical insurance (SMI)is a voluntary participatory program,commonly known as Medicare Part B.

Answer 3

True

Question 4

Hospital insurance will pay daily room and board charges up to a specified number of days and reimbursement for ancillary charges up to a specified dollar amount.

Question 5

Hospital insurance policies will pay for all hospital expenditures most of the time.

Question 6

Blue Cross provides hospital coverage and Blue Shield provides prescription pharmacy coverage.

Question 7

Medicare and Medicaid are hospital and physicians coverage,respectively.

Question 8

Blue Cross/Blue Shield provides prepaid health care to participants.

Question 9

A preferred provider organization has characteristics of both an IPA and an indemnity plan.

Question 10

Advances in medical technology,prescriptions drugs,and treatments have substantially reduced health care costs in recent decades.

Question 11

If you lose your job,COBRA permits you to continue your group health insurance coverage permanently as long as you pay the premium within 36 months of the termination of employment.

Question 12

Most major medical insurance plans feature a calendar-year,all-inclusive deductible.

Question 13

When you are hospitalized for surgical care,surgical expense coverage will pay the hospital bill.

Question 14

You have a better chance of choosing your own doctor with a PPO than with an HMO.

Question 15

Your bill for consultation with a specialist would ordinarily be paid by physician's expense coverage.

Question 16

HSAs are funded solely by employers,while HRAs are funded solely by employees.

Question 17

Some surgical expense insurance pays a specific amount for each type of surgery listed on a schedule of benefits.

Question 18

Comprehensive major medical insurance provides the most complete coverage available.

Question 19

About 13% of Americans are not covered by health insurance.

Question 20

Major medical plans supplement the basic coverage of hospital,surgical,and physician's expense insurance.

Question 21

Only 10% of American adults have purchased long-term care insurance.

Question 22

Losing your job triggers a "qualifying life event" that allows you to obtain new insurance outside the normal enrollment window.

Question 23

Hospital expense coverage is adequate for long-term or catastrophic medical needs of most people.

Question 24

Long-term care insurance provides protection against the cost of extended hospital stays.

Question 25

Most surgical expense plans fully reimburse the cost of second opinions.

Question 26

Disability occurs only when someone is completely incapable of doing any type of work.

Question 27

An elimination period is a term that applies to disability insurance but not long-term care insurance.

Question 28

Internal limits are constraints placed on insurance agents stipulating the level of risk for which they can write a policy.

Question 29

Many health insurance policies offer only reduced benefits for treatment of mental disorders.

Question 30

Comprehensive major medical simply increases the policy limits of major medical insurance without changing the coverage.

Question 31

In insurance terminology,"participation" and "co-insurance" mean the same thing.

Question 32

The major emphasis of dental insurance is to cover only extractions and x-rays.

Question 33

The ACA eliminates lifetime limits on total health care insurance payments by insurers.

Question 34

An elimination period is the number of days that must pass before disability policies pay proceeds.

Question 35

Your health insurance has an 80% co-insurance clause.Once the deductible is satisfied,your insurance company will pay 80% of your covered losses up to the stated limits.

Question 36

Long-term care insurance can cover both nursing home and home health care.

Question 37

A presumption disability clause presumes total disability with certain types of injuries even if the injured can work in some capacity.

Question 38

A stop-loss provision places a cap on the amount of participation required.

Question 39

Terms of payment and terms of coverage are two sets of provisions that should be carefully scrutinized when evaluating an insurance program.

Question 40

Health insurance policies automatically cover all family members.

Question 41

Medicare deductibles and co-insurance amounts are revised annually to reflect changing medical costs.

Question 42

With a COLA provision,the monthly long-term disability benefit is adjusted upward each year,often in line with the CPI.

Question 43

For most people,a managed care plan is a cheaper option compared to an indemnity plan.

Question 44

With a managed care plan,an insurance company may not be involved.

Question 45

A group HMO employs a group of doctors to provide healthcare services to members in a central facility.

Question 46

An Individual Practice Association differs from an HMO in that

A)you have no choice of the physician.
B)they are located in a central facility.
C)associated doctors operate from their own offices.
D)they are less likely to be found in small communities.
E)none of these.

Question 47

Under the ACA,all Americans are required to have or buy health insurance or pay a penalty.

Question 48

Living a healthy lifestyle is an example of loss prevention and control.

Question 49

The definition of "disability" is standardized in disability income policies.

Question 50

A point-of-service (POS)plan is a hybrid HMO that allows members to go outside of network.

Question 51

Choosing insurance plans with deductibles and waiting periods is a form of risk assumption.

Question 52

Disability benefits are almost always taxable,so you typically need to purchase coverage that will replace gross pay.

Question 53

Medicare Advantage plans are administered by the government and supplementary to original Medicare.

Question 54

As an HMO member,you may have co-payments but no deductibles.

Question 55

Insurers are required to cover people with pre-existing medical conditions without limiting or setting unrealistically high insurance rates.

Question 56

Under the ACA,family health care insurers must allow parents to retain their children on their health plans up to age 28.

Question 57

If your employment is terminated,COBRA provides for

A)cancellation of all group insurance benefits.
B)continuation of group insurance benefits until you are reemployed.
C)permanent continuation of group health insurance.
D)temporary continuation of group insurance benefits; you pay premiums.
E)temporary continuation of group insurance benefits; employer pays premiums.

Question 58

The "O" in COBRA stands for which of the following words?

A)Optical
B)Opportunity
C)Ordinary
D)Omnibus
E)Occupational

Question 59

Disability income benefits under social security will be paid as long as you cannot perform the duties of the job you were holding when the disability began.

Question 60

Jackie pays $20 every time she visits her doctor.She is covered by a(n)

A)HMO.
B)IPA.
C)PPO.
D)indemnity plan.
E)a, b, or c

Question 61

Suppose a person has a health insurance policy with a $500 calendar-year deductible,a $2,000 out-of-pocket cap,and an 80% coinsurance provision.If this person suffers a $600 covered loss,how much will the insurance company pay? (Assume no previous losses have occurred.)

A)$80
B)$100
C)$480
D)$600
E)Some other amount

Question 62

In recent years,which of the following groups paid the largest percentage of national health care expenditures?

A)Households (consumers)
B)Private businesses (employers)
C)State and local governments
D)Federal government

Question 63

Ben's health coverage charges a low ($15)deductible each time he visits the doctor or hospital.Other than the low per-service deductible,there is very little cost sharing.However,Ben must go to the health care providers listed by the provider of the health coverage.If he goes to a provider that is not on the list,there is very little coverage.Which of the following types of entity most likely provides Ben's health coverage?

A)HMO
B)Blue Cross/Blue Shield association
C)Commercial insurer (major medical)
D)PPO
E)Fee-for-service indemnity plan

Question 64

Nick has a comprehensive health care policy with a $250 per-calendar-year deductible,an 80% co-insurance provision,and a $1,000 copayment cap per calendar year.In January,Nick had a $600 claim for which the insurance company paid $280.Nick experiences another unrelated claim in October resulting in total bills of $5,000.How much will Nick have to pay for the second claim?

A)$5,000
B)$3,930
C)$1,800
D)$930
E)None of the above

Question 65

Which of the following statements is true about the means (income)testing for Medicare?

A)there are strictly enforced income limits that are based on federal standards but may vary slightly by state.
B)limits apply to the amount of counted assets individuals can have, but they are routinely overlooked.
C)means testing is intended to ensure that only the truly needy get access to Medicare.
D)there is an asset test and an income test.
E)Medicare is not income tested.

Question 66

Terms of payment under your health insurance are governed by

A)policy limits.
B)deductibles.
C)coordination of benefits.
D)set maximums for types of services.
E)all of the above.

Question 67

Which of the following best describes a "pre-existing condition"?

A)An exclusion
B)Cancer, heart condition, or other serious diseases
C)An injury that results from an accident
D)Something not covered by the insurance policy
E)A physical or mental problem you had at the time you bought the policy

Question 68

Supplementary Medical Insurance (SMI)provides health care protection beyond basic hospital coverage for

A)all Medicare recipients.
B)all social security recipients.
C)Medicare recipients who pay for SMI on a compulsory basis.
D)Medicaid recipients.
E)Medicare recipients who pay for SMI on a voluntary basis.

Question 69

Major medical plans are characterized by deductibles,internal limits,and

A)benefit levels.
B)participation or coinsurance.
C)illness or injury frequency limits.
D)maximum surgical medical benefits.
E)sliding or decreasing premiums.

Question 70

Medicare provides health care coverage to persons age ____ and those who are ____.

A)55 and over; collecting disability under Social Security
B)60 and over; collecting disability under Social Security
C)65 and over; collecting disability under Social Security
D)60 and over; low income
E)65 and over; low income

Question 71

Gabe is 58 years old and has been dependent on a cane for a couple of years.Gabe fears that he may need long-term care services some day in the future.His net worth is $400,000 and he receives $50,000 per year in a pension.He considers himself to be in excellent health and has never had a serious health scare like a heart attack,stroke,or cancer.He eats lots of bran and exercises regularly.Which of the following policies would you recommend to Gabe?

A)Gabe needs a disability income policy.
B)Gabe should buy a long-term care policy with a long elimination period, lifetime benefits, and a COLA.
C)Gabe should buy a long-term care policy with a five-year limit and short elimination period without a COLA.
D)Gabe doesn't need disability insurance and probably can't qualify for long-term care insurance.
E)Gabe can qualify for Medicaid if and when he needs long-term care services.

Question 72

Medicare is a government-sponsored health care plan composed of Part A and Part B.Part B coverage includes

A)hospital expenses.
B)doctor's bills.
C)custodial nursing home expenses.
D)prescription drugs.
E)all of the above.

Question 73

Miscellaneous sources of health care coverage include

A)homeowners insurance.
B)automobile insurance.
C)veterans benefits.
D)all of the above.
E)none of the above.

Question 74

A characteristic of dental insurance is

A)high cost.
B)dentist financing.
C)high deductible limits.
D)lack of orthodontic coverage.
E)low maximum limits.

Question 75

Medicare is a government-sponsored health care plan composed of Part A and Part B.Part A covers

A)hospital expenses.
B)doctor's bills.
C)custodial nursing home expenses.
D)prescription drugs.
E)all of the above.

Question 76

____ are required by many insurance plans to reduce the number of unnecessary surgeries.

A)Deductibles
B)Waiting periods before the surgery is performed
C)Second opinions
D)Meetings with company surgical committees
E)Approval by hospital surgical committees

Question 77

Given a $250 annual deductible,an 80% co-insurance provision,and a $5,000 copayment cap,how much of a $27,500 medical bill will be paid by the insured?

A)$250
B)$5,000
C)$5,450
D)$5,250
E)$5,700

Question 78

A "coordination of benefits" provision in a health insurance policy may possibly provide which of the following benefits?

A)Allows the policy holder to be double-covered for the same loss.
B)Provides broader coverage than a policy without such provision.
C)Often results in lower-cost insurance premiums.
D)Drops pre-existing conditions clauses from a policy.
E)All of the above

Question 79

Hospital indemnity policies would make payment for

A)surgery.
B)doctor's office visits.
C)private duty nursing care.
D)prescriptions when not in the hospital.
E)per-day hospital charges.

Question 80

Surgical expenses now generally are reimbursed on the basis of

A)actual surgical expense.
B)listed benefit schedules.
C)specific percentage of actual surgical expense.
D)average national cost of the surgery.
E)usual, reasonable, and customary expenses.