Question 1

All of the following statements about long-term care insurance are true EXCEPT

Accepted Answer

Premiums for long-term care insurance typically increase with shorter elimination periods, not decrease. The elimination period is the time between when a qualifying event occurs and when benefits start. Shorter elimination periods mean the insurer starts paying out benefits sooner, increasing the cost of the policy.

Question 2

Which of the following statements about individual disability income policies is true?

Accepted Answer

Many disability income policies provide a residual disability benefit for persons who are able to work but at a reduced income. Benefits may be paid for disabilities resulting from sickness or injury, and the amount of the benefit is typically a percentage of the insured person's lost income rather than the full amount. Benefits for partial disabilities are usually smaller than benefits for total disabilities.

Question 3

Which of the following statements is (are)true concerning benefit payments under long-term care insurance?
I.Expense-incurred policies pay for actual charges up to a specified daily limit.
II.Indemnity policies pay a specified daily benefit regardless of the charges incurred.

Accepted Answer

Expense-incurred policies pay for actual charges up to a specified daily limit, while indemnity policies pay a specified daily benefit regardless of the charges incurred. Therefore, both I and II are true.

Question 4

Dirk required surgery for a kidney impairment.His total bill for medical services was $50,000.Dirk has a medical expense policy with a $1,000 calendar-year deductible and a $5,000 annual out-of-pocket limit.His coinsurance percentage is 20 percent.The out-of-pocket limit applies to coinsurance only.Assuming this surgery and hospitalization were the first medical care that Dirk received during the year and that all of the hospital services were eligible for coverage under the policy,how much of the $50,000 bill will the insurer pay?

Accepted Answer

Dirk's insurance policy includes a $1,000 deductible, which he must pay first. After the deductible, the policy covers a certain percentage of the remaining costs, with Dirk responsible for 20% coinsurance until he reaches his $5,000 out-of-pocket limit. The $5,000 limit includes the $1,000 deductible, so Dirk's additional out-of-pocket coinsurance amount is $4,000. The total bill is $50,000. After the $1,000 deductible, $49,000 remains. Dirk pays 20% of the costs until he reaches his out-of-pocket limit. The insurer pays the remainder, which is $44,000.

Question 5

All the following are common exclusions in a medical expense insurance policy EXCEPT

Accepted Answer

Surgeons' fees are typically covered under a medical expense insurance policy, whereas dental care, long-term care, and routine eye care are often excluded.

Question 6

Kristen has an individual medical expense policy with a $1,000 calendar-year deductible,a $5,000 annual out-of-pocket limit,and 80-20 coinsurance.Kristen was hospitalized for a surgical procedure in March,her first health care treatment received during the year.The total bill was $20,000.Considering the deductible and coinsurance,how much of this amount must Kristen pay?

Accepted Answer

First, Kristen must pay the $1,000 deductible. Then, the coinsurance of 20% applies to the remaining $19,000 ($20,000 - $1,000), which means Kristen must pay 20% of that amount, which is $3,800. So Kristen's total out-of-pocket cost is $1,000 + $3,800 = $4,800. Therefore, the correct answer is B.

Question 7

The effect of an annual out-of-pocket limit in an individual medical expense policy is to

Accepted Answer

The annual out-of-pocket limit in an individual medical expense policy is designed to limit the amount an insured must pay out-of-pocket within a given year. Once this limit is reached, the policy covers 100 percent of eligible medical expenses, providing financial protection against high medical costs.

Question 8

Major defects in the health care system in the United States health care system include
I.Rising healthcare expenditures
II.Considerable waste and inefficiency in the healthcare system

Accepted Answer

Rising healthcare expenditures and considerable waste and inefficiency are two major defects in the US healthcare system. Rising healthcare expenditures make healthcare less accessible and affordable for many people. At the same time, considerable waste and inefficiency mean that many individuals aren't getting the care that they need, or when they receive care, it's often more expensive than it needs to be. Solutions to these problems may include preventative care measures and better incentives for healthcare providers to deliver cost-effective, high-quality care.

Question 9

Which of the following statements regarding health care expenditures in the United States is (are)true?
I.As a nation,the U.S.spends significantly more on health care than most other industrialized nations.
II.Health care expenditures in the U.S.are high because everyone is covered by a health insurance plan.

Accepted Answer

Statement I is true, as the U.S. spends significantly more on health care than most other industrialized nations. However, statement II is false, as not everyone in the U.S. is covered by a health insurance plan, which is one of the reasons for high health care expenditures.

Question 10

All of the following statements about individual disability income policies are true EXCEPT

Accepted Answer

Most disability income insurance policies contain an elimination period of at least 30 days, and often 60 or 90 days. A shorter elimination period may be available, but it typically results in a higher premium.

Question 11

Prior to passage of the Affordable Care Act,insurers could go back to the date a health insurance policy became effective and render the policy void due to a clerical error.This practice,which is prohibited under the Affordable Care Act except in cases of fraud or intentional misrepresentation of a material fact,is called

Accepted Answer

Rescission is the practice of voiding a health insurance policy back to its effective date due to a clerical error or other reasons, which is prohibited under the Affordable Care Act except in cases of fraud or intentional misrepresentation of a material fact. Estoppel is a legal doctrine that prevents a person from asserting a claim or right that contradicts what they previously said or did, while retention refers to the act of retaining or keeping something. Reformation is a legal remedy that allows a court to modify a contract to reflect the parties' real intentions.

Question 12

Individual medical expense insurance sold in the Health Insurance Marketplace is characterized by which of the following?

Accepted Answer

Individual medical expense insurance sold in the Health Insurance Marketplace is characterized by no lifetime benefit limits, which means that there is no limit to the amount of money an insured person can receive in benefits over their lifetime. This is a key feature of the Affordable Care Act (ACA) and distinguishes it from pre-ACA policies that often had lifetime maximums. While there are some exclusions and restrictions on coverage, the range of benefits is generally broad and includes preventive care, hospitalization, and prescription drugs. First-dollar coverage, which means that there is no deductible or coinsurance, is not a characteristic of most marketplace plans.

Question 13

One provision of the Affordable Care Act is designed to benefit young adults up to age 26.This provision allows these young adults to

Accepted Answer

The provision of the Affordable Care Act that benefits young adults up to age 26 allows them to remain covered under their parents' health insurance policies. This is known as "dependent coverage" and means that young adults can stay on their parents' plan even if they are no longer living at home, not in school, not financially dependent on their parents, or married. This provision has helped millions of young adults gain access to affordable health care.

Question 14

Under the Affordable Care Act,if a health insurer does not meet the minimum medical loss ratio requirement,the insurer must

Accepted Answer

If a health insurer does not meet the minimum medical loss ratio requirement, the insurer must issue rebates to the people the insurer covered. The medical loss ratio requirement under the Affordable Care Act mandates that insurers spend at least 80-85% of the collected premiums on medical care and healthcare quality improvement. If the spent amount is less than that, the insurer is required to issue a rebate to their consumers.

Question 15

Which of the following statements about disability and disability income insurance is (are)true?
I.Most disability income policies replace 100 percent of gross earnings.
II.The probability of being disabled before age 65 is much higher than commonly believed.

Accepted Answer

While statement I is not true, statement II is true. Studies have shown that the probability of a working person becoming disabled before age 65 is much higher than the probability of death before age 65. It is recommended to have disability income insurance to mitigate the financial impact of a disability. However, disability income policies typically do not replace 100 percent of gross earnings, usually replacing a percentage (e.g. 60 percent) of pre-disability income.

Question 16

Purposes of the coinsurance provision in medical expense insurance policies include which of the following?
I.to reduce premiums
II.to prevent overutilization of policy benefits

Accepted Answer

The purpose of the coinsurance provision in medical expense insurance policies is to reduce premiums as it shares the cost of medical expenses between the insured and the insurer, and to prevent overutilization of policy benefits by requiring the insured to pay a portion of the medical expenses. Therefore, both I and II are correct.

Question 17

The Affordable Care Act required that most U.S.citizens and legal residents have qualifying health insurance or pay a financial penalty.This provision of the Affordable Care Act was known as the

Accepted Answer

The provision of the Affordable Care Act requiring that most U.S. citizens and legal residents have qualifying health insurance or pay a financial penalty is known as the individual mandate. This was a controversial aspect of the ACA that aimed to increase the number of people with health insurance and reduce overall healthcare costs.

Question 18

Under the Affordable Care Act,which of the following statements are true?
I.Health insurers cannot use pre-existing conditions exclusions.
II.Health insurers cannot impose annual benefit limits and lifetime benefit limits.

Accepted Answer

Both statements are true. Under the ACA, health insurers are not allowed to use pre-existing conditions exclusions and cannot impose annual and lifetime benefit limits. This was done to ensure that individuals who need medical care will have access to the necessary treatments without being limited by their insurance coverage.

Question 19

Which of the following statements about long-term care insurance is (are)true?
I.Long-term care insurance is inexpensive,especially if purchased at older ages.
II.Purchasers have a choice of daily benefits and benefit periods.

Accepted Answer

Statement I is false as long-term care insurance can be quite expensive, especially for those who wait until older ages to purchase it. Statement II is true as purchasers have the option to choose their daily benefit amount and benefit period to fit their needs and budget.

Question 20

All of the following are historical reasons for the increase in health care expenditures in the U.S.EXCEPT

Accepted Answer

Universal health insurance coverage has not been a historical reason for the increase in health care expenditures in the U.S. On the contrary, lack of universal coverage has contributed to higher healthcare costs, as uninsured individuals are less likely to seek preventive care and end up utilizing expensive emergency services for their healthcare needs. The other options listed, such as cost insulation due to third-party payers, employer-sponsored health insurance, and technological advances, have all been historical reasons for the increase in health care expenditures in the U.S.

Quiz 15: Health-Care Reform;individual Health Insurance Coverages

All of the following statements about long-term care insurance are true EXCEPT

Which of the following statements about individual disability income policies is true?

Which of the following statements is (are) true concerning benefit payments under long-term care insurance? I.Expense-incurred policies pay for actual charges up to a specified daily limit. II.Indemnity policies pay a specified daily benefit regardless of the charges incurred.

All the following are common exclusions in a medical expense insurance policy EXCEPT

The effect of an annual out-of-pocket limit in an individual medical expense policy is to

Major defects in the health care system in the United States health care system include I.Rising healthcare expenditures II.Considerable waste and inefficiency in the healthcare system

All of the following statements about individual disability income policies are true EXCEPT

Individual medical expense insurance sold in the Health Insurance Marketplace is characterized by which of the following?

One provision of the Affordable Care Act is designed to benefit young adults up to age 26.This provision allows these young adults to

Under the Affordable Care Act,if a health insurer does not meet the minimum medical loss ratio requirement,the insurer must

Which of the following statements about disability and disability income insurance is (are) true? I.Most disability income policies replace 100 percent of gross earnings. II.The probability of being disabled before age 65 is much higher than commonly believed.

Purposes of the coinsurance provision in medical expense insurance policies include which of the following? I.to reduce premiums II.to prevent overutilization of policy benefits

The Affordable Care Act required that most U.S.citizens and legal residents have qualifying health insurance or pay a financial penalty.This provision of the Affordable Care Act was known as the

Under the Affordable Care Act,which of the following statements are true? I.Health insurers cannot use pre-existing conditions exclusions. II.Health insurers cannot impose annual benefit limits and lifetime benefit limits.

Which of the following statements about long-term care insurance is (are) true? I.Long-term care insurance is inexpensive,especially if purchased at older ages. II.Purchasers have a choice of daily benefits and benefit periods.

All of the following are historical reasons for the increase in health care expenditures in the U.S.EXCEPT