Deck 9: Health and Disability Insurance

Question 1

A health insurance policy that pays you back for actual expenses is called a reimbursement policy.

Answer 1

True

Question 2

The benefit limits provision identifies the minimum benefits that will be paid for days spent in the hospital.

Answer 2

False

Question 3

Some policies consider the average fee for a service in a particular geographical area. They then use that amount to set a minimum payment for policyholders.

Answer 3

False

Question 4

A deductible is a set amount you must pay toward medical expenses before the insurance company pays benefits.

Question 5

Long-term care insurance is used to pay for a stay in a nursing home but not for help at home.

Question 6

All group health insurance plans provide the same level of protection.

Question 7

A PPO is another name for an HMO.

Question 8

The Health Insurance Portability and Accountability Act of 1996 set new federal standards to ensure that workers would not lose their health insurance if they changed jobs.

Question 9

Surgical expense insurance pays all or part of the surgeon's fees for an operation in a doctor's office.

Question 10

A Medicare Advantage Plan (Part C) combines your Part A (Hospital) and Part B (Medical) coverages into one plan.

Question 11

FSAs and HSAs provide tax advantages for health care expenses.

Question 12

A health reimbursement account (HRA) is funded solely by your employer and gives you a pot of money to spend on health care.

Question 13

The copayment provision deals with the amount that someone will pay for a bill such as 20% coinsurance.

Question 14

A health insurance policy that pays you back for actual expenses is called an indemnity policy.

Question 15

A flexible spending account (FSA) is funded by an employer.

Question 16

Health insurance is a form of protection that eases the financial burden people may experience as a result of someone's death.

Question 17

Blue Cross and Blue Shield are two types of HMOs.

Question 18

A PPO is a group of doctors and hospitals that agree to provide health care at rates approved by the insurer

Question 19

An employer self-funded health plan requires a low level of financial assets.

Question 20

With a guaranteed renewable provision in a health insurance policy, the insurer is permitted to raise premiums for all members of a group.

Question 21

Most people receive health insurance under a group plan from

A) Individual plans.
B) Their bank or lending institution.
C) Their employer.
D) COBRA.
E) All of the above.

Question 22

The period before you can receive benefits in a disability plan is called the probationary period.

Question 23

Disability income insurance policies are required to provide benefits for disabled policyholders until age 65.

Question 24

The financial problems caused by death are greater than those caused by disability.

Question 25

Medicare typically covers routine checkups.

Question 26

Medicare is offered to certain low-income individuals and families.

Question 27

Coordination of benefits (COB) provision applies to

A) Combining health insurance and disability insurance coverage.
B) Combining all group and individual insurance coverages.
C) Combining the Health Insurance Portability and Accountability Act of 1996 and COBRA.
D) Combining three or more disability policies issued for an individual.
E) Combining the benefits of two insurance policies issued for a married couple.

Question 28

What is the primary purpose of medical expense insurance?

A) Protect against death expenses.
B) Provide payments to make up for some income of a person who cannot work as a result of injury or illness.
C) Pay actual medical costs for illness or injury.
D) Pay a salary if an employee is disabled.
E) Repay loans if an employee cannot work because of illness or injury.

Question 29

Workers are considered disabled if they have a physical or mental condition that prevents them from working and that is expected to last for at least 12 months or to result in death.

Question 30

The United States has the fifth highest per capita medical expenditures of any country in the world.

Question 31

Disability income insurance covers your medical expenses when you are disabled.

Question 32

Which of the following is correct?

A) A premium reimburses you for hospital stays, doctors' visits, and medications.
B) A premium is the amount your employer will pay for your health insurance coverage.
C) Disability income insurance pays actual medical costs.
D) Medical expense insurance provides payments to make up for income of a person who cannot work as a result of injury or illness.
E) Health insurance plans may reimburse an individual for hospital stays, doctors' visits, and medications.

Question 33

Health care costs have decreased because of aging baby boomers using fewer health care services.

Question 34

Everyone qualifies for COBRA.

Question 35

A good disability income insurance plan will pay you if you cannot work at any job.

Question 36

Administrative costs in the United States consume half of the health care dollars. spent.

Question 37

The Health Insurance Portability and Accountability Act of 1996

A) Sets federal standards to ensure that workers do not lose their health insurance if they change jobs.
B) Sets state standards to ensure that workers do not lose their health insurance if they change jobs.
C) Applies to individual health insurance policies.
D) Prevents employees from moving from one group health plan to another without a lapse in coverage.
E) Is a replacement for the Consolidated Omnibus Budget Reconciliation Act of 1986.

Question 38

The Health Insurance and the Patient Protection and Affordable Care Act of 2010 requires health insurance companies to submit justification for all requested premium increases.

Question 39

A disability policy with a longer elimination period typically charges lower premiums than a policy with a short elimination period.

Question 40

A summary plan description outlines the disadvantages of your health plan along with your legal rights under the Employment Retirement Income Security Act.

Question 41

COBRA stands for

A) Coverage of Benefits Reduction Act.
B) Continuation of Benefits for Retirees Act.
C) Consolidated Omnibus Budget Reconciliation Act.
D) Coverage of Benefits for the Retired Act.
E) Consolidation of Benefit Reapplication Act.

Question 42

The insurance that helps pay hospital, surgical, medical, and other bills with a low deductible is known as a(n)

A) Basic health insurance policy.
B) Individual policy.
C) Comprehensive major medical policy.
D) Hospital indemnity policy.
E) Dread disease policy.

Question 43

The type of health insurance coverage that may cover routine doctor visits, X-rays, and lab tests is

A) Dental expense.
B) Surgical expense.
C) Hospital expense.
D) Physician expense.
E) Major medical expense.

Question 44

The type of health insurance coverage that pays for some or all of the daily costs of room and board during a hospital stay is

A) Dental expense.
B) Surgical expense.
C) Hospital expense.
D) Physician expense.
E) Major medical expense.

Question 45

Fran is interested in purchasing a major medical policy that limits the total out-of-pocket amount that she will have to pay. She should consider a

A) Copay.
B) Coinsurance.
C) Stop-loss provision.
D) Hospital indemnity policy.
E) Dread disease policy.

Question 46

Jenny wants health insurance that sets the amount that she must pay toward medical expenses before the insurance starts paying benefits. She is concerned about a

A) Deductible.
B) Coinsurance.
C) Vision care policy.
D) Hospital indemnity policy.
E) Dread disease policy.

Question 47

Miguel is concerned that the health insurance option he is considering plays upon unrealistic fears. He is most concerned about a

A) Deductible.
B) Coinsurance.
C) Stop-loss provision.
D) Hospital indemnity policy.
E) Dread disease policy.

Question 48

Which of the following about individual health insurance policies is NOT correct?

A) They can cover individuals.
B) They are used by the self-employed.
C) They can provide family coverage.
D) All insurance companies that offer this type of policy are required to charge the same rates.
E) They can be purchased directly from the company of your choice.

Question 49

This health insurance provision sets specific levels of repayment for certain services.

A) Assigned benefits
B) Copayment
C) Exclusions and limitations
D) Internal limits
E) Service benefits

Question 50

A policy that pays you back for actual expenses is called

A) A coinsurance plan.
B) A reimbursement plan.
C) A deductible plan.
D) An indemnity plan.
E) A reasonable and customary plan.

Question 51

What is a typical copayment amount for individuals?

A) $0-5
B) $20-30
C) $35-50
D) $75-100
E) $100-200

Question 52

Which of the following is INCORRECT about dread disease policies?

A) They are illegal in many states.
B) Each policy covers a wide range of conditions.
C) They play upon unrealistic fears.
D) These policies are usually sold through the mail, in newspapers, and magazines, or by door-to-door salespeople.
E) They cover diseases that are already covered if you are insured under a major medical plan.

Question 53

Which of the following is TRUE about long-term care insurance?

A) It covers help at home but not in a nursing home.
B) It covers a stay in a nursing home but not help at home.
C) The older you are when you enroll, the higher the annual premium.
D) Insurance plans are sold primarily to individuals in the 20-40 age group.
E) These plans typically pay for all costs.

Question 54

Nancy is studying the health insurance plan options offered by her employer. She wants a policy that will have the insurance pay a percentage of her medical expenses after she meets her deductible. She should review the

A) Deductible.
B) Coinsurance.
C) Stop-loss provision.
D) Hospital indemnity policy.
E) Dread disease policy.

Question 55

A health insurance policy with this provision lists coverage in terms of services, not dollar amounts.

A) Assigned benefits
B) Benefit limits
C) Exclusions and limitations
D) Internal limits
E) Service benefits

Question 56

Which of the following about individual health insurance policies is correct?

A) They are used by employees of large organizations.
B) All insurance companies that offer this type of policy are required to charge the same rates.
C) They are primarily for employees of small companies.
D) They are permitted for individuals only, not for families.
E) They are available for the self-employed or others who are dissatisfied with the coverage that their group plan provides.

Question 57

This health insurance provision lets your insurer make direct payments to your doctor or hospital.

A) Assigned benefits
B) Benefit limits
C) Exclusions and limitations
D) Internal limits
E) Service benefits

Question 58

Which of the following is NOT a type of health insurance available to individuals or employees?

A) Dental expense insurance
B) Hospital indemnity policy
C) Dread disease policy
D) Minor medical indemnity insurance
E) Vision care insurance

Question 59

The type of health insurance coverage that takes up where basic health insurance coverage leaves off is

A) Dental expense.
B) Surgical expense.
C) Hospital expense.
D) Physician expense.
E) Major medical expense.

Question 60

The type of health insurance coverage that may specify the maximum payment amount for each type of operation is

A) Dental expense.
B) Surgical expense.
C) Hospital expense.
D) Physician expense.
E) Major medical expense.

Question 61

A health insurance plan should include all of the following "must-haves" except

A) Offer basic coverage for hospital and doctor bills.
B) Impose no unreasonable exclusions.
C) Limit out-of-pocket expenses to no more than $3,000 to $5,000 per year.
D) Provide at least 120 days' hospital room and board in full.
E) Provide a lifetime maximum level of coverage of up to $50,000.

Question 62

Yvonne's employer offers a health plan that has a group of doctors and hospitals that agree to provide specified medical services to members at prearranged fees. This health plan offers some flexibility since members can either visit a physician from a list or go to their own doctors. What kind of plan does her employer offer?

A) Medicaid
B) Public insurance company
C) Hospital and medical service plan
D) Medicare
E) Preferred provider organization (PPO)

Question 63

Who is most likely to use a home health care agency?

A) A mother who is looking for a plan to cover immunizations for her children.
B) A healthy young adult.
C) A family with teenagers who need annual check-ups for sports at school.
D) An elderly neighbor.
E) All of these would be likely to use a home health care agency.

Question 64

Medicaid covers

A) Lab services.
B) Skilled nursing and home health services.
C) Prescription drugs.
D) Eyeglasses.
E) All of these.

Question 65

Which of the following is a government health care program?

A) Health maintenance organization (HMO)
B) Home health care agency
C) Hospital and medical service plan
D) Medicare
E) Preferred provider organization (PPO)

Question 66

Individuals over the age of 65 who are eligible for medicare may also be interested in purchasing more coverage called

A) Medicare Part A.
B) Medicare Part B.
C) Medicaid.
D) Medigap.
E) Statewide health coverage.

Question 67

Monica's employer offers a health insurance plan with a very high deductible. In addition, her employer provides a fund for her to spend specifically on health care. What kind of plan does she have?

A) FSA
B) HRA
C) HSA
D) Medicare
E) Self-funded health plan

Question 68

Medicare (Part A) covers

A) Dental care.
B) Routine checkups.
C) Most immunizations.
D) Inpatient hospital care.
E) None of these are covered.

Question 69

This type of plan combines features of HMOs and PPOs. It uses a network of participating physicians and medical professionals who have contracted to provide services for certain fees.

A) Home health care agency
B) Hospital and medical service plan
C) Medicare
D) Point-of-service (POS) plan
E) Public insurance company

Question 70

Blue Cross and Blue Shield are

A) Health maintenance organizations (HMO).
B) Private insurance companies.
C) Statewide organizations.
D) Types of Medicare.
E) Preferred provider organizations (PPO).

Question 71

After you have reached a certain limit that you must pay for the deductible and coinsurance, the insurance company covers 100% of any additional cost. This is called

A) Reimbursement.
B) Out-of-pocket limit.
C) Deductible.
D) Internal limit.
E) Indemnity.

Question 72

The set amount that you must pay toward medical expenses before the insurance company pays benefits is called

A) Reimbursement.
B) Reasonable and customary charges.
C) Deductible.
D) Internal limit.
E) Indemnity.

Question 73

Which of the following is incorrect?

A) Disability income insurance provides regular cash income when you're unable to work because of a disability.
B) Disabilities can include pregnancy, a non-work-related accident, or an illness.
C) The exact definition of disability varies from insurer to insurer.
D) A bad disability policy pays you if you cannot work at your regular job.
E) Disability can cause even greater financial problems than death.

Question 74

A provision in a health insurance policy that sets specific levels of repayment for certain services is called

A) Reimbursement.
B) Out-of-pocket limit.
C) Deductible.
D) Internal limit.
E) Indemnity.

Question 75

Jack needs comprehensive medical coverage. However, his income is very low. What plan should he investigate?

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

Question 76

Steve's employer offers a health plan that stresses preventive services and covers routine immunizations and checkups, screening programs, and diagnostic tests. What kind of plan does his employer offer?

A) Health maintenance organization (HMO)
B) Public insurance company
C) Hospital and medical service plan
D) Medicare
E) Medicaid

Question 77

Anna contributes pretax dollars to an account managed by her employer for her health care expenses. If she does not spend all of her money by the end of the year, she may forfeit it. What kind of plan does she have?

A) FSA
B) HRA
C) Medicaid
D) Medicare
E) Self-funded health plan

Question 78

A Medigap policy fills the gap between medicare payments and medical costs not covered by

A) Home health care agencies.
B) Hospital and medical service plans.
C) Medicare.
D) Medicaid.
E) Private insurance companies.

Question 79

Brittany and Brandon are both charged $250 for an office visit to the same specialist. Brittany's reimbursement policy has a deductible of $300. Once she has met the deductible, the policy will cover the full cost of her visits. Brandon's indemnity policy will pay him $150, the maximum amount his plan provides for a visit to any specialist. Which of the following is correct?

A) Brittany will pay less because the policy will cover up to $300 for her visit.
B) Brittany will pay more because she must pay the entire bill since she has not met her deductible while Brandon will have part of his bill paid by his policy.
C) Brandon will pay $150 and his insurance company will pay $100.
D) Brandon will pay more because Brittany will have the first $300 paid by her policy.
E) None of these is correct.

Question 80

Jacob is concerned that his out-of-pocket health care expenses will be quite high, so he is considering adding contributions to a tax-free account that he can use with his high-deductible policy to cover catastrophic expenses. What kind of plan does he have?

A) FSA
B) HRA
C) HSA
D) Medicare
E) Self-funded health plan