Deck 18: Social Security

Question 1

A widow or widower of a fully insured deceased worker is qualified for benefits at age fifty, if disabled.

Answer 1

True

Question 2

A beneficiary attaining the normal retirement age after 2002 is exempt from reduction of Social Security benefits regardless of the amount of earned income.

Answer 2

True

Question 3

The combination of Part C Medicare Advantage plans with Part D prescription drug benefits are known as Medicare Advantage Prescription Drug plans.

Answer 3

True

Question 4

Both Social Security and Medicare programs face a long-term financing gap.

Question 5

Anyone who is eligible railroad retirement benefits at age sixty-five is also eligible for Medicare Part A.

Question 6

Through Medicare Part D, eligible participants can elect to receive the benefits of Medicare Parts A and B through private health plans, in addition to certain items not covered by Medicare Parts A and B.

Question 7

Like social insurance, employers and employees pay into the public assistance system to earn their rights to benefits.

Question 8

For an individual retiring past the normal retirement age, the final benefit amount is equal to what the PIA formula reveals.

Question 9

Wages beyond the threshold are not subject to the Medicare Part A tax, but they are subject to the OASDI tax.

Question 10

The current generations of taxpayers are confident about the ability of the Social Security system to deliver benefits at current inflation-adjusted levels.

Question 11

The current Social Security benefit levels cannot be maintained without raising Social Security withholding taxes or extending the normal retirement age.

Question 12

Social insurance is also referred to as public assistance.

Question 13

Normal retirement age for the purposes of Social Security ranges from sixty-two to sixty-five.

Question 14

The insurance principles of assessing and pooling risk do not apply to welfare programs.

Question 15

Social Security is need-based and does not depend on a person's employment history.

Question 16

A fully insured worker is entitled to receive reduced benefits for Social Security, if he retires at the age of sixty-two.

Question 17

If an individual qualifies as both a worker and as the spouse of a worker, the beneficiary will receive whichever primary insurance amount is greater, but not both.

Question 18

In the last two decades, Social Security taxes have increased much faster than the general level of prices, but not as fast as the cost of health care.

Question 19

The bend points decrease as average wages in the economy increase.

Question 20

Both public assistance programs and social insurance programs are organized and undertaken by the government and have the broad social purpose of reducing want and destitution.

Question 21

To be eligible to receive benefits, a worker must achieve insured status.This status is achieved if the Social Security beneficiary has at least six credits in the thirteen-quarter period ending with the quarter of death.Identify this insured status.

A)Currently insured status
B)Inclusively insured status
C)Fully insured status
D)Disability insured status
E)Exclusively insured status

Question 22

Identify the correct statement about survivors' benefits.

A)A widow or widower of a fully insured deceased worker is qualified for benefits at age forty, if disabled.
B)A divorced spouse qualifies for benefits if he or she was married to the worker for at least ten years even if he or she has remarried.
C)A parent of a fully insured deceased worker is entitled to benefits if he or she is at least age sixty-two, even if he or she was not dependent on the child.
D)In the absence of parents, a spouse, or children, the lump-sum death benefit of $255 is paid to the closest relative.
E)A parent of a fully insured deceased worker is entitled to benefits if he or she is not entitled to a retirement or disability benefit equal to or larger than this survivors' benefit.

Question 23

The maximum family benefit is the maximum monthly amount that can be paid on a worker's earnings record.When the family reaches its maximum family benefit, the:

A)worker's benefit is reduced.
B)benefit of the survivor is stopped.
C)benefit of the dependent is stopped.
D)worker's benefit is stopped.
E)worker's benefit is not reduced.

Question 24

This benefit is paid to the spouse living with the worker at the time of death, or a spouse otherwise entitled, or children entitled of a fully or currently insured worker.It has not increased since the Social Security legislation was passed in 1935.Identify this benefit.

A)Early retirement benefit
B)Disability benefit
C)Health benefit
D)Lump-sum death benefit
E)Late retirement benefit

Question 25

To be eligible to receive benefits, a worker must achieve insured status.A Social Security beneficiary acquires this status once forty credits of coverage are earned, or when the beneficiary has a minimum of six credits of coverage and, if greater, at least as many quarters of coverage as there are years elapsing after 1950, or after age twenty-one.Identify this insured status.

A)Currently insured status
B)Partially insured status
C)Fully insured status
D)Disability insured status
E)Exclusively insured status

Question 26

The objective of this program is to provide a "floor of protection" or a "reasonable level of living." It is the foundation on which retirement, survivors', and disability benefits should be designed.In addition, the program is the foundation for health benefits for the retired population under Medicare Part A, Part B, Part C, and Part D.Identify this program.

A)Social Security
B)Retirement plan administration program
C)Medicaid
D)Workers' compensation program
E)Unemployment benefit program

Question 27

To be eligible to receive Social Security benefits, a worker must:

A)be above 18 years of age.
B)be unemployed for atleast a period of 6 months.
C)not be disabled.
D)achieve insured status.
E)not have a criminal record.

Question 28

Which of the following statements is true about Social Security?

A)Nearly all employees in private industry, railroad workers, and members of the armed forces are covered by Social Security.
B)Railroad workers are excluded from Social Security.
C)After 1984, local government bodies can elect not to cover certain employees under Social Security.
D)Municipal governments that elected out prior to 1984 do not have the option to join the Social Security program voluntarily.
E)Ministers are covered automatically and do not have the right to waiver, even on religious grounds.

Question 29

The Social Security program is the foundation for health benefits for the retired population under the Medicare plans.Managed care medicine is included in _____ of the Medicare plan.

A)Part A
B)Part B
C)Part C
D)Part D
E)Part E

Question 30

During the calculation of this factor, workers' earnings for prior years, up to the maximum Social Security wage base are adjusted to what they would have been if wage levels in earlier years had been the same as they are now.Identify this factor.

A)Average forecasted monthly earnings
B)Average replacement annual earnings
C)Actual indexed annual cost
D)Average indexed monthly earnings
E)Average extended replacement cost

Question 31

Which of the following is true about disability benefits in Social Security?

A)They have a waiting period of one year.
B)A nonblind person earning more than $580 in 2009 is not eligible for Social Security benefits.
C)Threshold amounts allowed to earn to receive benefits for the blind are indexed annually to increases in the national wage index.
D)A blind person can earn upto $2,500 and still be eligible for these benefits.
E)These benefits cannot be stopped even if the disabled worker refuses to participate in rehabilitation.

Question 32

The first part of OASDHI is the old-age, survivors', and disability (OASD) insurance program known as:

A)social security.
B)public assistance.
C)welfare program.
D)Medicare.
E)workers' compensation.

Question 33

An individual is entitled to full disability benefit through Social Security if:

A)he is blind and earning $1,500 in 2009.
B)he is nonblind and earning $1,000 in 2009.
C)he is blind, earns $500 in 2009, and refuses to participate in rehabilitation.
D)he is permanently disabled, receiving benefits from workers' compensation.
E)he is blind and earning $2,000 in 2009.

Question 34

Social Security _____ benefits protect the dependents of a fully or currently insured deceased worker.

A)disability
B)survivors'
C)early retirement
D)medical
E)late retirement

Question 35

These points represent the dollar amounts at which the primary insurance amount formula for Social Security benefits changes.These points increase as average wages in the economy increase.Identify these points.

A)Replacement points
B)Bend points
C)Proximity points
D)Extended points
E)Indexed points

Question 36

Regarding the privatization of Social Security program, a majority polled say that "making sure that people receive a better rate of return" is a higher priority than "making sure that people receive a decent, guaranteed monthly retirement benefit."

Question 37

This is an insurance program that is compulsory for nearly all Americans, eligibility criteria and benefits are specified by law, and financing is wholly or partially covered by the employer.Some examples of these insurance programs include workers' compensation and unemployment compensation, and Social Security.Identify these programs.

A)Welfare program
B)Convenience program
C)Managed care program
D)Public assistance
E)Social insurance

Question 38

Originally, this program was a compulsory pension plan known as Old Age Insurance (OAI).Later, survivors' benefits were added and the program became known as Old Age and Survivors' Insurance (OASI).When disability benefits were added, it became Old Age, Survivors', and Disability Insurance (OASDI), and, with the addition of hospital and medical benefits, it became the Old Age, Survivors', Disability, and Hospital Insurance (OASDHI) program.Identify this program.

A)Medicaid
B)Unemployment benefit program
C)Workers' compensation program
D)Social Security
E)Retirement plan administration program

Question 39

The Social Security program is the foundation for health benefits for the retired population under the Medicare plans.Medicare Part A is mostly concerned about:

A)doctors.
B)hospitals.
C)managed care medicine.
D)the new drug program.
E)nurses.

Question 40

Which of the following statements is true about retirement income benefits, if a fully insured worker retires?

A)A divorce spouse of a retired worker is not entitled to monthly benefits.
B)A spouse of a retired worker is entitled to monthly benefits only if she is unemployed.
C)A divorce spouse of a retired worker is entitled to benefits if the marriage lasted at least five years.
D)A dependent child of a retired worker is entitled to benefits if he or she is under the age of eighteen.
E)A dependent great-grandchild of a retired worker is entitled to benefits if he is disabled, and the disability began after age twenty-two.

Question 41

Social Security taxes, sometimes called _____ taxes, are automatically withheld on wages up to a set amount and are adjusted annually for inflation.Any wages earned over this wage base are not taxed for Social Security, although Medicare Part A taxes are still deducted.

A)Federal Insurance Contributions Act
B)Social Security Contributions Act
C)State Insurance Contributions Act
D)Unemployment Security Contributions Act
E)State Security Contributions Act

Question 42

Which of the following reasons can be attributed to the long-term financing gap faced by the Social Security and Medicare programs?

A)Increasing birth rates and health care costs
B)Pay-as-you-go system and declining birth rates
C)Traditional system and increased longevity
D)Increased birth rates and declining longevity
E)Increased morbidity and birth rates

Question 43

Define primary insurance amount and average indexed monthly earnings.

Question 44

_____ is a major social insurance program that was created in 1935 as an outcome of the Great Depression.

Question 45

Which of the following services is provided by Medicare Part B?

A)In-patient hospital services
B)Routine care of the eyes
C)Out-patient hospital services
D)Posthospital home health services
E)Hospice care

Question 46

The _____ program is the second largest social insurance program in the United States.

Question 47

Social Security benefit amounts are increased annually by automatic cost-of-living adjustments.The theory is to:

A)prevent inflation from eroding the value of Social Security.
B)encourage economic growth.
C)reduce the moral hazard of malingering.
D)discourage adverse selection in Social Security.
E)cope up with increases in health care expenses.

Question 48

Write a note on Medicare Part A.

Question 49

Identify the charges that are not included through Medicare Parts A and B?

A)In-patient hospital services
B)Routine care of the eyes
C)Out-patient hospital services
D)Posthospital home health services
E)Hospice care

Question 50

The purpose of this test is to limit monthly cash benefits for retirees who have earned income and to reduce the cost of the Social Security program.Identify this test.

A)Reliability test
B)Accountability test
C)Earnings test
D)Compatibility test
E)Exclusivity test

Question 51

Which of the following statements is true about the Social Security program?

A)It is administered by the Social Security Administration, an agency of the United States Department of Labor.
B)It is primarily a traditional system, where funds are set aside in advance to accumulate over time and benefits are paid to those who contributed to the fund.
C)Survivors' benefit determination-the decision whether an applicant is entitled to survivor' benefit as determined by law-is made by the state agency.
D)Qualification for retirement and survivors' benefits is determined by the district office, but claims for such benefits are processed through private insurer intermediaries.
E)The Social Security is a pay-as-you-go-system, meaning that current tax revenues are used to pay the current benefits of Social Security recipients.

Question 52

Under this part, the Social Security Administration and the Centers for Medicare & Medicaid Services work together to provide persons with limited income and resources with extra help paying for their prescription drugs.Identify this Medicare coverage.

A)Medicare Part A
B)Medicare Part B
C)Medicare Part C
D)Medicare Part D
E)Medicare Part E

Question 53

The Social Security retirement benefit may be reduced for a retiree who is younger than normal retirement age and whose annual earned income exceeds the retirement earnings exempt amount; this provision is called the:

A)compatibility test.
B)exclusivity test.
C)reliability test.
D)earnings test.
E)accountability test.

Question 54

What are Medicare Advantage Prescription Drug plans?

Question 55

What is an earnings test? Explain its purpose.

Question 56

Which of the following services is provided by Medicare Part A?

A)Out-patient hospital services
B)Hospice care
C)Durable medical equipment
D)Cosmetic surgery
E)Routine care of the eyes, ears, and feet

Question 57

Write a note on the eligibility criterion for disability benefits under the Social Security program.

Question 58

The Social Security funding burden is being borne by a shrinking sector of society because:

A)mortality rates have increased and longevity has declined.
B)birth rates have increased and death rates have decreased.
C)longevity has increased and birth rates have declined.
D)mortality and birth rates have increased.
E)longevity has increased and morbidity rates have declined.

Question 59

Write a short note on the types of benefits available for Social Security.

Question 60

To be eligible to receive Social Security benefits, a worker must achieve insured status.Discuss the different types of insured status.

Question 61

The _____ is the basic unit used to determine the amount of monthly Social Security benefits.It is computed from a person's average indexed monthly earnings.

Question 62

Social Security benefits are financed through payroll taxes paid by employers and employees and by a special tax on earnings paid by the self-employed.The tax rate for employers and employees is 6.2 percent for OASDI, up to a maximum amount of earnings called the _____.

Question 63

Social Security benefit amounts are increased annually by _____ linked to increases in the consumer price index.

Question 64

Medicare _____, also known as Medicare+Choice, was authorized by the Balanced Budget Act of 1997.

Question 65

Medicare _____ is the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, enacted December 8, 2003.

Question 66

The Social Security system is primarily a(n) _____ system, meaning that current tax revenues are used to pay the current benefits of Social Security recipients.

Question 67

Medicare Part C or Medicare+Choice became known as _____ plans with the addition of prescription drug coverage through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

Question 68

In the case of _____, a benefit is reduced 5/9 of 1 percent for each month before the normal retirement age for Social Security benefits.

Question 69

Medicare _____ covers physician services, out-patient hospital services, certain home health services, durable medical equipment, and other items.

Question 70

To be eligible to receive benefits, a worker must achieve insured status._____ status is gained by the Social Security beneficiary having twenty credits in the ten years before disability begins.

Question 71

Public assistance programs are also referred to as _____ programs.

Question 72

FICA taxes is another name for _____ taxes.

Question 73

The primary insurance amount, computed from _____ up to the Social Security wage base, is used to determine the amount of monthly benefits.

Question 74

To be eligible to receive benefits, a worker must achieve insured status.If the worker's status is _____, most types of Social Security benefits are payable.

Question 75

The second part of the OASDHI program is known as _____.