Deck 22: Employment and Individual Health Risk Management

Question 1

Maternity benefits are available as a rider, or optional coverage, in group insurance, but they cannot be optional in individual policies.

Answer 1

False

Question 2

Health maintenance organizations are cheaper than preferred provider organizations and health maintenance organizations with open access.

Answer 2

False

Question 3

A major criticism of health maintenance organizations is the limited choice of providers for subscribers.

Answer 3

True

Question 4

Maternity coverage is excluded in group medical expense insurance policies.

Question 5

If the health maintenance organization providers overtreat subscribers, they receive extra money.

Question 6

A group plan that does not include a coordination of benefits provision is considered the secondary insurer by all insurers that have such provisions.

Question 7

In group insurance, the benefit period is usually a calendar year.

Question 8

Like most preferred provider organizations, health maintenance organizations give employees and their dependents a broad choice of providers.

Question 9

Unlike sick leave, short-term disability income plans do not have the restriction of elimination period to pay benefits to employees.

Question 10

The consumer-driven health plans and high-deductible health plans intend to transform the defined contribution plans approach to health insurance into defined benefits as part of an ownership society paradigm.

Question 11

With major medical policies, the insured pays most of the cost for medical services.

Question 12

Medical savings accounts were used for individuals and large employers only and were not available to small employers or the self-employed.

Question 13

Second surgical opinions require that two surgeons agree that surgery needs to be done before the insurer will pay for the procedure.

Question 14

When a child is insured under both parents' plans, the policy of the parent whose birthday falls first in the year is the primary policy.

Question 15

Contribution to a health savings account can be made by the employer or the individual, or both.If made by the employer, the contribution is not taxable to the employee.If it is made by the individual, it is a before-tax contribution.

Question 16

In managed care, capitation is a set amount paid to each health care provider based on the number of subscribers in the provider's plan.

Question 17

Dental policies not only cover routine care but also protect insureds against more expensive procedures such as restorative services.

Question 18

The doctors in an individual practice association can see both health maintenance organization and non- health maintenance organization patients.

Question 19

Health maintenance organizations cover routine checkups even when the employee is not ill.

Question 20

Extended care facilities provide basic medical care needed during some recoveries, rather than the intensive and more expensive medical service of a hospital.

Question 21

In defined contribution health plans, rather than employers negotiating with insurers or managed-care organizations for the group health plans, consumers are encouraged to negotiate directly with providers because these new plans are considered:

A)market-driven health plans.
B)consumer-driven health plans.
C)supply-driven health plans.
D)product-driven health plans.
E)service-driven health plans.

Question 22

This policy covers room and board (for a specified number of days) and hospital ancillary charges, such as those for x-ray imaging and laboratory tests.It primarily provides benefits during a hospital confinement.In addition, it covers outpatient surgery and limited emergency care in case of an accident.Identify this policy.

A)Basic medical expense policy
B)Supplemental medical expense policy
C)Basic hospital policy
D)Major medical expense policy
E)Comprehensive medical expense policy

Question 23

Identify the program with the highest level of preventive care.

A)Indemnity
B)Preferred provider organization
C)Health savings accounts
D)Health maintenance organization
E)Point of service

Question 24

Which of the following can be cited as a disadvantage of managed-care systems?

A)Huge amount of paperwork for patients
B)Low standards of quality care
C)Inefficient cost containment
D)Limited access
E)Access to only inexperienced doctors

Question 25

Unlike short-term insured plans, which generally cover all full-time workers, long-term disability plans usually cover mostly salaried workers after they meet a probationary period lasting from three months to one year.

Question 26

Which of the following is a preferred provided organization that includes a primary care physician to serve as a gatekeeper?

A)Point of service
B)Indemnity plans
C)Demutualized plans
D)Health service accounts
E)Defined benefit health plan

Question 27

In many cases, the point of service and individual practice association are very similar from the point of view of the patients, except that when the point of service is based on a preferred provider organization rather than a health maintenance organization, there is:

A)more access to out-of-network providers.
B)more paperwork involved in the process.
C)more than one gatekeeper involved, which increases the cost of service.
D)a risk that the patient may have to pay from his or her own pocket.
E)less access to out-of-network providers.

Question 28

This policy covers all or part of doctors' fees for hospital, office, or home visits due to nonsurgical care.Most policies have an overall limit of a daily rate multiplied by the number of days in the hospital.Common exclusions are routine examinations, eye examinations, x-rays, and prescription drugs.Identify this policy.

A)Basic medical expense policy
B)Supplemental medical expense policy
C)Basic hospital policy
D)Major medical expense policy
E)Comprehensive medical expense policy

Question 29

In traditional fee-for-service medical expense insurance, identify the insurance that provides coverage for large losses.

A)Hospital expense insurance
B)Comprehensive medical insurance
C)Surgical expense insurance
D)Supplemental medical insurance
E)Medical expense insurance

Question 30

In major medical insurance policies, the _____ provision gives the percentage of expenses the insurer will pay in excess of the deductible.It may vary from 70 to 90 percent; 80 percent is common.

A)indemnity
B)coordination of benefits
C)stop-loss
D)estoppel
E)coinsurance

Question 31

In traditional fee-for-service medical expense insurance, basic health care benefits cover:

A)hospital, supplemental, and major medical expenses.
B)hospital, surgical, and comprehensive expenses.
C)hospital, comprehensive, and medical expenses.
D)surgical, medical, and major medical expenses.
E)hospital, surgical, and medical expenses.

Question 32

This policy covers the expense of almost all medical services prescribed by a doctor.It provides coverage for almost all charges for hospitals, doctors, medicines, blood, wheelchairs, and other medically necessary items.Identify this policy.

A)Basic medical expense policy
B)Supplemental medical expense policy
C)Basic hospital policy
D)Major medical expense policy
E)Comprehensive medical expense policy

Question 33

The staff model, the group model, the network model of doctors, and the individual practice association are different models of:

A)indemnity plans.
B)preferred provider organizations.
C)health savings accounts.
D)health maintenance organizations.
E)point of service.

Question 34

While the old systems are considered _____ programs, the new ideas call for defined contribution health plans in which the consumer/employee receives a certain amount of money from the employer and then selects the desired health care components.

A)defined benefit health
B)health maintenance organization
C)preferred provider organization
D)high-deductible health
E)consumer-driven health

Question 35

Which of the following can be cited as a reason for the introduction of managed care in traditional indemnity plans?

A)Demutualization of insurance companies.
B)The introduction of the PATRIOT Act after 9/11.
C)Adverse selection against indemnity plans.
D)Morale hazard against indemnity plans.
E)Lack of access to good health service providers.

Question 36

In a major medical insurance policy, the _____ protects the insured from excessive cost sharing, which could be financially devastating.

A)coinsurance provision
B)indemnity provision
C)deductible
D)stop-loss limit
E)coordination of benefits provision

Question 37

Which of the following programs have a minimum level of preventive care?

A)Indemnity
B)Preferred provider organization
C)Health savings accounts
D)Health maintenance organization
E)Point of service

Question 38

Identify the rationale behind cost-sharing provisions like deductibles and coinsurance.

A)They limit excessive losses to the insured.
B)They reduce moral hazard.
C)They reduce paperwork.
D)They control adverse selection.
E)They discourage health service provides to be careless.

Question 39

Who among the following are most likely to opt for health maintenance organization plans?

A)A teenager with an acute heart disease.
B)A retired person with minor health issues.
C)A retired person with major health issues.
D)A healthy retired person with only age related health issues.
E)A healthy young person with no history of illness.

Question 40

This program encourages participants to make more informed, cost-conscious decisions about their health care.Patients opting for this program have to open a savings account, pay deductible and other coinsurance, and copay up to a maximum.Identify this program.

A)Indemnity
B)Preferred provider organization
C)Health savings accounts
D)Health maintenance organization
E)Point of service

Question 41

Dental insurance policies are available in both the individual and group market.In these policies, procedures such as fillings, crowns, and bridges are included under:

A)normal diagnostic services.
B)surgical services.
C)preventive services.
D)orthodontia.
E)restorative services.

Question 42

Describe basic health care benefits of traditional fee-for-service medical expense insurance.

Question 43

Write a short note on health reimbursement arrangements.

Question 44

If a gatekeeper is removed or taken off from a point of service, it becomes a(n) _____.

Question 45

The costs of health care services that insurers generally agree to cover in fee-for-service or managed care arrangements, based on studies of the appropriate cost for each medical procedure is known as _____ cost.

Question 46

The coordination of benefits provision reduces the total cost of health insurance by over 10 percent by:

A)discouraging moral hazard.
B)reducing administrative expenses.
C)reducing duplicate payments.
D)reducing payments from the insureds.
E)limiting adverse selection.

Question 47

In traditional fee-for-service policies, the second surgical opinion provision is included in the _____ technique of cost containment.

A)plan design
B)distributive funding
C)administrative and funding
D)utilization review
E)contribution

Question 48

Which of the following statements is true about cancer or critical insurance policy?

A)It is meant to cover the travel expenses associated with the illness.
B)It pays the doctors for extra services for cancer patients.
C)It pays the medical bills that are specifically associated with terminal diseases.
D)It is a disability income policy for lost time at work.
E)It provides accelerated benefits for the critically ill patient in case it is not provided by life insurance.

Question 49

Write a short note of Medigap insurance.

Question 50

In 1983, the federal government adopted the practice of paying a flat fee for each Medicare patient based on the patient's diagnostic-related group.This cost containment technique provided an economic incentive to providers, specifically hospitals, to minimize the length of stay and other cost parameters.Identify this cost containment technique.

A)Wellness program
B)Prospective payment
C)Distributive funding program
D)Home health care
E)Facultative contribution program

Question 51

Explain the important features of cancer or critical illness policy.

Question 52

The health savings account can be part of a health maintenance organization, preferred provider organization, or indemnity plan, as long as it has a:

A)100 percent reimbursement guarantee.
B)second surgical opinion provision.
C)stop-loss limit.
D)high deductible.
E)coordination of benefits provision.

Question 53

Under these plans, there is less incentive to abuse sick leave and more reward to employees who never use sick leave.These plans consolidate sick leave, personal leave, and vacation leave into a total number of personal days off each year.Identify these plans.

A)Consolidated pay off plans
B)Paid time off plans
C)Facultative pay plans
D)Contributory plans
E)Distributive time off plans

Question 54

This disability insurance policy provision coordinates benefits under different disability policies by providing for a reduction in benefit payments if the total amount of income payments under all insurance policies covering the loss exceeds earnings at the time disability commences, or exceeds the average earnings for two years preceding disability, whichever is greater.Identify this provision.

A)Coinsurance provision
B)Indemnity provision
C)Average earnings provision
D)stop-loss limit provision
E)coordination of benefits provision

Question 55

Which of the following statements is true about comprehensive medical insurance?

A)It puts a heavy financial burden on the insured due to its high percentage of cost-sharing provisions.
B)It is not available to individuals who earn below $60,000 annually.
C)It does not include cost-sharing provisions like deductibles.
D)Except for cost-sharing provision, it is usually similar to basic medical expense policy.
E)It is sold mainly on a group basis.

Question 56

These health plans were created by the Medicare bill signed by President Bush on December 8, 2003, and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.Identify these health plans.

A)Indemnity plans
B)Health maintenance organizations
C)Health savings accounts
D)Preferred provider organizations
E)Point of service plans

Question 57

Managed-care fee-for-service plans control access to procedures by:

A)providing insureds with economic incentives to choose efficient providers.
B)covering services only from health maintenance organization providers.
C)monitoring service usage and costs on a case-by-case basis.
D)provisions like preadmission certification.
E)using a gatekeeper.

Question 58

A cost containment initiative by employers has been to sponsor these programs designed to promote healthy lifestyles and reduce the incidence and severity of employee medical expenses.They vary greatly in scope.Some are limited to educational sessions on good health habits and screening for high blood pressure, cholesterol, diabetes, cancer symptoms, and other treatable conditions.More extensive programs provide physical fitness gymnasiums for aerobic exercise such as biking, running, and walking.Identify cost containment programs.

A)Wellness programs
B)Prospective payment programs
C)Distributive funding programs
D)Home health care programs
E)Facultative contribution programs

Question 59

Keira is a health maintenance organization subscriber.She sees a specialist without a referral from the health maintenance organization.Which of the following will most like follow?

A)Keira can sue her primary physician (and win) if the specialist thinks that her health condition required specialist attention.
B)Keira will have to bear a partial cost for the visit (according to coinsurance provisions) if the specialist thinks that the visit was essential.
C)Keira will not be allowed to visit her primary physician because she went to the specialist without his or her permission.
D)Keira's insurer will bear the entire cost of the specialist if it is proven that the visit was essential, and lack of it would have adverse effect on Keira's health.
E)Keira will be responsible for paying the specialist for the full cost of care.

Question 60

This provision establishes a system of primary and secondary insurers.The primary insurer pays the normal benefit amount, as if no other insurance were in force.Then the secondary insurer pays the balance of the covered health care expenses.The total payments by the primary and secondary insurers are limited to 100 percent of the covered charges for the applicable policies.Identify this provision.

A)Coordination of benefits
B)Deductible
C)Indemnity
D)Coinsurance
E)Stop-loss

Question 61

In both the preferred provider organization and individual practice association -based networks with a gatekeeper, the provider specialists receive discounted fees for service, while the gatekeepers (primary care physicians) receive _____.

Question 62

_____ disability insurance policies generally define disability as the inability of the employee to perform any and every duty of the job.

Question 63

Two basic types of health maintenance organizations are available.In _____, which can be either for-profit or not-for-profit organizations, contractual arrangements are made with physicians and other providers in a community who practice out of their own offices and treat both health maintenance organizations and non- health maintenance organizations members.

Question 64

_____ are groups of hospitals, physicians, and other health care providers that contract with insurers, third-party administrators, or directly with employers to provide medical care to members of the contracting group(s) at discounted prices.

Question 65

_____ is a life insurance rider that covers the costs of nursing home stays, home health care treatment, and other long-term care services typically covered by stand-alone long-term care insurance policies.

Question 66

Deductibles and coinsurance requirements are _____ provisions that increase the personal cost to the insured of using medical services.

Question 67

_____ benefits reimburse insureds for actual costs incurred for health care up to covered limits in traditional fee-for-service plans.

Question 68

_____ is a disability policy provision that replaces Social Security benefits if the individual does not qualify under the strict definition of disability in Social Security.

Question 69

Health savings accounts are modeled after the _____.

Question 70

The _____ policy usually pays providers according to a schedule of procedures, regardless of whether the surgery is performed in a hospital or elsewhere.

Question 71

With _____ plans, employees accumulate leave, typically at a rate of one day per month of work up to a maximum of twenty-six weeks.In the event of illness or disability, the employee uses these and receives 100 percent income replacement beginning on the first day of illness or disability.

Question 72

_____ testing are diagnostic tests done on an outpatient basis prior to a patient's surgery to reduce the total time spent in the hospital.

Question 73

_____ organizations offer peer judgments on whether a hospital admission is necessary, whether the length of the hospital stay is appropriate for the medical condition, and whether the quality of care is commensurate with the patient's needs.

Question 74

A(n) _____ provision requires only that the insured get a second opinion to increase the information available before making a decision about whether to have the surgery.