Question 1

Your grandmother has just turned 65 years old and is now eligible for Medicare.She asks you whether or not she should also purchase Medigap insurance.What would you tell her to do?

Accepted Answer

While Medicare does provide comprehensive coverage, there are still gaps in coverage, such as deductibles, copayments, and coinsurance. Medigap insurance can help cover these gaps and provide additional benefits, making it a good idea for many Medicare beneficiaries to purchase. It's important for your grandmother to carefully consider her healthcare needs and budget before making a decision.

Question 2

For every $100 set aside in a flexible spending account,taxable income is reduced by

Accepted Answer

Flexible spending accounts (FSAs) allow individuals to set aside pre-tax dollars for eligible expenses, which means the entire amount set aside reduces taxable income. Therefore, for every $100 set aside in an FSA, taxable income is reduced by $100.

Question 3

An employer-sponsored medical plan that allows each employee to have pretax earnings deposited into a specially designated account for the purposes of paying specific types of expenses is called a

Accepted Answer

The employer-sponsored medical plan described in the question is referring to a flexible spending account (FSA), which is commonly offered as a benefit to employees. FSAs allow employees to set aside a portion of their pre-tax earnings to pay for qualified medical expenses such as deductibles, copayments, and prescriptions. This can help employees save money on their healthcare expenses and reduce their overall tax burden.

Question 4

All of the following are true regarding Health Savings Accounts except

Accepted Answer

Unspent HSA funds do not expire at the end of the year. In fact, they roll over and accumulate year after year.

Question 5

Sylvester and JoAnn have both been laid off work during the last year and are now very poor.They found out that needy families can receive medical benefits through Medicaid.In addition,JoAnn found out that Medicaid can be used

Accepted Answer

Medicaid is a federal program that provides medical benefits to those who are classified as low-income or are in financial need. Eligibility for Medicaid varies from state to state, but in general, the program can be used by the aged, blind, disabled persons, and for Medicare premiums, deductibles, and co-payments. Therefore, all of the options listed in the answer choices are correct.

Question 6

Managed health care/prepaid care plans differ from fee-for-service or traditional indemnity plans in that they

Accepted Answer

Managed health care or prepaid care plans, such as HMOs and PPOs, often file claims on behalf of patients, making the process more streamlined for the individual. Additionally, these plans typically require members to see healthcare providers within a specified network, which can include doctors, hospitals, and clinics, to receive the full benefits of the plan. This contrasts with traditional fee-for-service plans, where patients can see any provider and then file a claim for reimbursement.

Question 7

Individual practice association,group practice,and point-of-service plans are the three basic types of

Accepted Answer

Individual practice association, group practice, and point-of-service plans are all types of managed care plans offered by health maintenance organizations (HMOs). Therefore, the correct answer is D - health maintenance organizations. The other choices are not accurate descriptions of these plan types.

Question 8

James is employed by the university.Yesterday he fell outside of his office due to water on the floor.He broke his leg in two places.What type of health care plan will cover James' expenses?

Accepted Answer

Worker's Compensation is a type of insurance that provides benefits to employees who experience work-related injuries or illnesses. Since James fell outside of his office while on the job, he would be eligible for Worker's Compensation to cover his medical expenses, including the cost of his broken leg. Medicaid and Medicare are government-sponsored healthcare programs that mainly cover medical expenses for those who are eligible based on factors like age, income, and disability. Medigap is a supplemental insurance policy that individuals can purchase to cover costs not covered by Medicare. None of these options would be the best choice for James, as his injury is work-related and therefore covered by Worker's Compensation.

Question 9

Your health care coverage is with a PPO.For approved,in-network providers your deductible is $500 and your coinsurance provision is 80%.For out-of-network providers,your deductible is $1,000 and your coinsurance provision is 70%.Assume there is no co-pay provision and you have no other claims this calendar year.You have decided to go to a specialist that is not in the network and the bill is $1,400.How much will you have to pay out-of-pocket?

Accepted Answer

First, you pay the out-of-network deductible of $1,000. The remaining $400 is then subject to the 70% coinsurance, meaning the insurance pays 70% of $400 ($280), and you pay 30% of $400 ($120). So, your total out-of-pocket cost is $1,000 (deductible) + $120 (your share of coinsurance) = $1,120.

Question 10

Medicare part ________ pays for doctor's fees/medical services/supplies,while part ________ pays for hospital insurance benefits.

Accepted Answer

Medicare Part B covers doctor's fees, medical services, and supplies, while Part A covers hospital insurance benefits.

Question 11

The difference between an individual practice association plan (IPA)and a group practice plan is that

Accepted Answer

An IPA plan consists of a group of independent doctors who work independently in their own offices, but they agree to work with a specific health insurance company while a group practice plan is a medical practice confined them to the same central, shared facility, such as a hospital, clinic, or medical center. Therefore, option A is the correct answer.

Question 12

Under COBRA,if you work for a company with at least 20 employees,you will be given the opportunity to continue your health insurance coverage for ________ after you leave the company,depending on why you left.

Accepted Answer

COBRA allows you to continue your health insurance coverage for up to 18-36 months after leaving a company with at least 20 employees, depending on the reason for leaving. This includes reasons such as resignation or termination, but not for gross misconduct.

Question 13

Veronica was recently diagnosed with a heart condition.Her doctor's bill was $4,200 for the diagnostics.Her policy has a $250 deductible and a 80/20 coinsurance provision up to $10,000 and then the insurance pays 100% thereafter.In total,how much will Veronica pay for her diagnosis?

Accepted Answer

Veronica's policy has a deductible of $250, which she will have to pay herself. After that, her insurance will cover 80% of the remaining costs, up to a maximum of $10,000. The total cost of her diagnostics was $4,200, so she will have to pay $250 + 20% x ($4,200 - $250) = $1,040 out of pocket. Therefore, the best choice is C.

Question 14

Group health insurance

Accepted Answer

Group health insurance refers to the way the health insurance is sold, typically through an employer or other organization, and does not necessarily reflect the characteristics of the policy. The cost and coverage of group health insurance can vary depending on the specific policy and the size and demographics of the group, but it is not inherently more expensive or tied to the age and health of individual policyholders.

Question 15

A ________ is a savings plan offered by some employers that allows each employee to have pretax earnings deposited into a specially designated account for paying qualified medical and dependant care bills.

Accepted Answer

A flexible spending account (FSA) is a savings plan offered by some employers that allows each employee to have pre-tax earnings deposited into a designated account for paying qualified medical and dependent care bills.

Question 16

Which of the following statements is true about individual health care policies versus group healthcare policies?

Accepted Answer

Individual health care policies often require a physical exam for eligibility, can serve as supplements to group policies, and are tailored to the individual's needs. They tend to be more costly than group plans, making all but option B correct.

Question 17

Your entire family was injured in an automobile accident,some more seriously than others.If any member of your family became disabled to a greater extent,where might you look for disability benefits?

Accepted Answer

Worker's Compensation only covers disability resulting from work-related injuries or illnesses. Medicare typically only covers medical expenses and has limited coverage for long-term disability. Medicaid may provide disability benefits, but eligibility depends on income and assets. Social Security provides disability benefits for individuals who are unable to work due to a disability, regardless of the cause. Therefore, the best choice would be a combination of Social Security and Medicaid for disability benefits.

Question 18

Which of the following is a government-sponsored health care plan?

Accepted Answer

The answer of Which of the following is a government-sponsored...

Question 19

When firms allow employees to "opt out" regarding health care,employees

Accepted Answer

When firms allow employees to "opt out" regarding health care, they are usually offered a cash incentive for electing not to cover their families under the company health plan. This is a way for firms to reduce the cost of their health care plan while still providing an option for employees who may have coverage through a spouse or other means. Option B and C are not typical requirements for opting out of company health plans.

Question 20

Suppose that you wanted to purchase insurance that is sold by a private insurance company that will help bridge the gap in your Medicare coverage.You would purchase what type of insurance?

Accepted Answer

Medigap insurance, also known as Medicare Supplement Insurance, is designed to help cover the "gaps" in Original Medicare coverage, such as deductibles, coinsurance, and copayments. Private insurance companies offer these plans, which can provide additional benefits and protection for beneficiaries.

Quiz 9: Life and Health Insurance