Georgia Medicare Study Flashcards
State Exam
What information are the members of the Medical Information Bureau required to report?
Adverse medical information about the applicants or insured
When should an agent obtain a Statement of Good Health from the insured?
When the premium was paid upon policy delivery and NOT at the time of application
Who is responsible for paying the cost of medical examinations required in the process of underwriting?
Insurer
If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation?
The applicant
What is the entire contract in health insurance underwriting?
The application and the policy issued
Who must sign a health insurance application?
The policyowner, the insured (if different), and the agent.
Whose responsibility is it to inform an applicant for health insurance about the insurer’s information gathering practices?
The agent
In health insurance, the policy itself and the insurance application form what?
The entire contract
If an agent makes a correction on the application for health insurance, who must initial the correct answer?
The applicant
What entities make up the Medical Information Bureau?
Insurers
If an underwriter requires extensive information about the applicant’s medical history, what report will best serves this purpose?
Attending Physician’s Statement
What is the term used for a written request for an insurer to issue an insurance contract based on the provided information?
Application
What is the best way to make a change on an application for insurance?
Start over with a fresh application
What type of hospital policy pays a fixed amount each day that the insured is in the hospital?
Hospital Indemnity
With key person disability insurance, who pays the policy premiums?
The business
Can Alzheimer’s disease be excluded from coverage under a long-term care policy?
No, organic cognitive disorders, such as Alzheimer’s and Parkinson’s must be covered.
How are HMO territories typical divided?
Geographic areas
What type of injuries and services will be excluded from major medical coverage?
Injuries caused by war, intentionally self-inflicted injuries, injuries covered by workers comp., regular dental/vision/hearing care, custodial care, and elective cosmetic surgery.
How can an HMO member see a specialist?
Referral by the primary care physician
What does the amount of disability benefit that an insured can receive depend on?
The insured’s income at the time of policy application
What is the main principle of an HMO plan?
Preventive Care
Can a insured who belongs to a POS plan use an out-of network physician?
Yes, but the copays and deductibles may be higher
What is COBRA?
To allow continuation of health insurance coverage for terminated employees
What is a fee-for-service health plan?
Under a fee-for-service plan, providers receive payments for each service provided
What type of health insurance would pay for hiring a replacement for an important employee who becomes disabled?
Key-person disability insurance
What is the purpose of respite care in long-term care insurance?
To provide relief for a major caregiver (usually family member)
Who are the parties in a group health contract?
The employer and the insurer
What is the capital sum in Accidental Death and Dismemberment (AD&D) coverage?
A percentage of the principal sum
What do individual insureds receive as proof of their group health coverage?
Certificate of Insurance (COI)
In what type of health plans are providers paid for services in advance, regardless of the services provided?
Prepaid Plans
In order to be eligible for coverage by an HSA, an individual must also be covered by what type of health plans?
HDHP- High deductible Health Plan
What are the two types of Flexible Spending Accounts?
Health care accounts and dependent care accounts
In health insurance, what is considered a sickness?
An illness that first arises while the policy is in force
What is the primary purpose of disability income insurance?
To replace income lost due to a disability
Who chooses a primary care physician in an HMO plan?
The individual member
Insurers or agents soliciting partnership polices must provide each prospective applicant with all of the following EXCEPT:
A statement that the insured does not automatically qualify for Medicare Part A
Which of the following is NOT covered under Plan A in Medigap insurance?
The Medicare Part A deductible
All of the following statements about Medicare supplement insurance policies are correct EXCEPT:
They cover the cost of extended nursing home care
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called:
Preferred Provider Organization (PPO)
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?
During the open enrollment period
Which of the following terms refer to the acts of soliciting insurance, making an insurance contract effective, and dealing with matters arising from that contract?
Transacting insurance
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?
Neither approved the application nor issued the policy.
The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed?
Employers are no longer forced to offer HMO plans.
Which of the following would be required to be licensed as an insurance producer?
A salaried employee who advertises and solicits insurance
In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?
No tax
Which of the following riders would NOT increase the premium for a policyowner?
Impairment rider
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured’s loss of earnings after recovery from a disability?
Residual disability
Following an injury, a policyowner covered under Medicare Parts A & B was treated by her physician on an outpatient basis. How much of her doctor’s bill will she be required to pay out-of-pocket?
20% of covered charges above the deductible.
Which statement regarding qualifications for Social Security disability benefits is NOT true?
The individual must be at least 65 years old
All accident and health insurance policies issued in this state MUST include a grace period of at least?
30 days
Which of the following is an example of a producer’s fiduciary duty?
The trust that a client places in the producer in regard to handling premiums.
Which of the following statements is INCORRECT?
Replacing insurance policies for the purpose of making commissions is legal
Insurers may change which of the following on a guaranteed renewable health insurance policy?
Rates by class
What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?
Probationary period
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 20-day?
Elimination period
All of the following are unfair claims settlement practices EXCEPT
Suggesting negotiations in settling the claim
The requirements that agents not commingle insurance monies with their own funds is know as?
Fiduciary responsibility
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
45 days
Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for the accidents become effective?
Immediately
Which of the following is TRUE regarding Medicare Supplement policies?
These policies may not contain limitations of coverage except for those permitted by the pre-existing condition clause
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Conditional
Which of the following is TRUE regarding elimination periods and the cost of coverage?
The longer the elimination period, the lower the cost of coverage
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered?
An unfair trade practice
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?
Foreign
Which of the following would best describe total disability?
A person’s ability to work is significantly reduced or eliminated for the rest of his/her life.
Once an agent has met the requirements to sell long-term insurance partnership policies, how often must the agent complete the 4 hours of ongoing training courses?
Every 24 months
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an
Authorized insurer
The Medical Information Bureau (MIB) was created to protect
Insurance companies from adverse selection by high risk persons.
What is the purpose of coinsurance provisions?
To help the insurance company to prevent overutilization of the policy
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid.
Which is TRUE regarding the Uniform Individual Accident and Sickness Policy Provisions Law?
Provisions may be reworded by the insurer.
An insurer filled a form with the Commissioners 90 days ago, but the Commissioner has yet to approve or disprove the form. What can the insurer do?
Consider the form approved and begin using it.
Which type of misrepresentation persuades an insured, to their detriment, to cancel, lapse, or switch polices from one to another?
Twisting
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the losses known as
Subrogation
Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called
Key employee disability insurance.
In insurance, an offer is usually made when
An applicant submits an application to the insurer
Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT
When the amount payable under Social Security is more than the amount payable under the rider.
Which of the following statements concerning group health insurance is CORRECT?
The employer is the policyholder
The maximum penalty that may be addressed for a single nonwillful violation of the Insurance Code is
$1,000
All of the following are the most common variations in a Long-Term Care policy EXCEPT
Number of family dependents
An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is TRUE?
There is NOTHING wrong with this form of policy delivery
Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be the best for Ray?
50/50
The provision that states that both the printed contract and a copy of the application form the contract between the policyowner and the insurer is called the
Entire Contract
Which of the following is NOT a responsibility of an insurance agent?
Underwriting the contract
Which of the following would be considered an illegal inducement to purchase insurance?
Confirming future dividends in a life insurance proposal
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is TRUE
The group plan will not pay because the employee was injured at work.
Under what condition are group disability income benefits received by an employee NOT taxable as income?
When the benefits received are equal or less than the employee’s percentage of the contribution
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT
Inviting prospective clients to the grand opening of any company’s new office.
All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPT
Elective cosmetic procedures are covered.
Which of the following statements is NOT correct concerning the COBRA Act of 1985?
It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.
Which is TRUE regarding HMO coverage?
It is divided into Geographic territories
