Chapter 3 Health Flashcards

1
Q

M is insured under a Basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim amount M is eligible for?

A

Determined by the terms of the policy

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2
Q

Which of the following can an individual use their medical flexible spending account to pay for?

Vitamins and supplements

Prescription drugs

Household expenditures

Cosmetic procedures

A

Prescription drugs

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3
Q

The first portion of a covered expense that the insured is required to pay before Major Medical Coverage applies is called the

A

Initial deductible

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4
Q

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that reimburses an insured for surgeon expenses

Coverage that pays a stated amount per day of a covered hospitalization

Coverage that replaces lost income due to hospitalization

Coverage that pays for hospital room and board

A

Coverage that pays a stated amount per day of a covered hospitalization

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5
Q

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?

A

$1,600. In this situation, $2,200 - $200 deductible x 80% = $1,600.

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6
Q

Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?

Employee funds the HRA entirely

Employer funds the HRA entirely

HRA’s can be offered with other health plans

HRA’s allow reimbursement for eligible medical expenses

A

Employee funds the HRA entirely. This is inaccurate. HRA plans are employer-funded medical reimbursement plans.

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7
Q

Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness?

Major Medical

Hospital Expense

Surgical Expense

Hospital Income

A

Major Medical

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8
Q

The phrase “This policy will only pay for a semi-private room” is an example of a(n)

A

internal limit. Certain types of expenses may have limits placed on the dollar amount of certain services or on the type of service provided.

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9
Q

Which of the following individual health insurance policies will provide the broadest protection?

Hospital Expense

Surgical Expense

Major Medical

Limited Sickness

A

Major Medical

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10
Q

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will

A

Continue Coverage but exclude the heart condition. If the insured did not cite the condition on the application and the insurer did not exclude the condition, the pre-existing condition provision still applies. Exclusions are subject to the “time limit on certain defenses” provision, however.

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11
Q

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

A

High-deductible health plan. To be eligible for a Health Savings Account, an individual must be covered by a high-deductible health plan (HDHP), must not be covered by other health insurance (does not apply to accident insurance, disability, dental care, vision care, long-term care), must not be eligible for Medicare, and can’t be claimed as a dependent on someone else’s tax return.

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12
Q

Which of the following statements BEST describes dental care indemnity coverage?

Services are reimbursed before the insurer receives the invoice

Services are reimbursed after insurer receives the bill

In-network dentists must always be used

Very limited list of providers

A

Services are reimbursed after insurer receives the bill

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13
Q

Which of the following phrases refers to the fees charged by a healthcare professional?

Deductible

Coinsurance

Usual, customary, and reasonable expenses

Hospital expense

A

Usual, customary, and reasonable expenses

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14
Q

All of the following statements about Major Medical benefits are true EXCEPT

The deductible can be expressed as a fixed dollar amount

The benefit period begins only after a specified amount of expenses have accrued

Benefits are generally expressed as a percentage of eligible expenses

Benefits have no maximum limit

A

Benefits have no maximum limit, They do have a limit

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15
Q

A Health Reimbursement Arrangement MUST be established

A

By the employer. HRAs are employer-established benefit plans that must be funded by the employer.

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16
Q

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?

A

Dread disease insurance. Dread disease insurance provides benefits for ONLY specific types of illnesses such as cancer or stroke.

17
Q

Which of the following types of policies frequently uses the term “deductible”?

Major Medical policy

Basic Surgical policy

Basic Hospital policy

Worker’s Compensation

A

Major Medical policy. Most major medical benefits begin to be paid after the deductible is satisfied.

18
Q

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?

A

$3,000. In this situation, the insured is responsible for $1,000 deductible + 20% of the remaining bill = $3,000.

19
Q

In Major Medical Expense policies, what is the intent of a Stop Loss provision?

A

Limits an insured’s out-of-pocket medical expenses

20
Q

A characteristic of Preferred Provider Organizations (PPOs) would be

A

Discounted fees for the patient. Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.