Healthcare Plans and Concepts Flashcards
the terms “usual, customary, and reasonable” refer to which of the following?
A
The average charge for a medical procedure, treatment, or service in a defined geographical area
B
A non-physician’s evaluation and approval of a medical procedure recommended by a patient’s physician or surgeon
C
The most commonly performed operations or treatments in a given territory
D
The standard accepted medical procedure for a given illness or injury
A -
The average charge for a medical procedure, treatment, or service in a defined geographical area
Managed health care plans generally refer to covered persons as ____________.
A
Beneficiaries
B
Subscribers
C
Insureds
D
Providers
B
Subscribers
HMOs usually require patients to select a ___________ as the person who will oversee and direct their basic health care in most cases.
A
Medical social worker
B
Care coordinator
C
Primary Care Physician
D
Insurance agent or broker
C
Primary Care Physician
All of the following are differences between a PPO plan and an HMO, EXCEPT:
A
Providers charge a discounted fee negotiated in advance
B
Use of a Primary Care Physician
C
Freedom to choose any service provider
D
It is a managed care plan
D
It is a managed care plan
Basic health plans provide “first dollar” coverage, which means:
A
The beneficiary of an insured must pay the first dollar of expenses if an insured dies prior to paying the claim
B
Benefits are payable starting with the first dollar of expenses incurred up to a stated maximum benefit and without a deductible
C
The insured must pay a deductible first before the insurer will pay any benefits
D
The insurance company pays 100% of all claims and the insured has no out-of-pocket expenses
B
Benefits are payable starting with the first dollar of expenses incurred up to a stated maximum benefit and without a deductible
An insured is covered under a major medical plan with a $500 deductible that has not been paid and 80/20 coinsurance requirement. A minor injury is suffered and the total covered cost for treatment is $1,500. How much will the insurance company cover?
A
$700
B
$500
C
$1,200
D
$800
D
$800
Newborn children are covered under medical expense plans beginning ___________.
A
On the 31st day following birth
B
On the 14th day following birth
C
On the 15th day following birth
D
Immediately at birth and for at least 31 days
D
Immediately at birth and for at least 31 days
A High Deductible Health Plan is a:
A
Health plan offered by large companies who are trying to minimize the growing cost of providing employee health insurance
B
Health plan which requires the insured to absorb a relatively high deductible in exchange for a significantly reduced premium
C
Health Maintenance Organization established to provide comprehensive medical services on a prepaid basis
D
Basic medical expense plan which pays first dollar expenses
B
Health plan which requires the insured to absorb a relatively high deductible in exchange for a significantly reduced premium
A flexible spending account can only be opened if:
A
A qualified long-term care coverage is purchased
B
The insured is self-employed
C
Offered through an employer-established benefit plan
D
A High Deductible Health Plan is purchased
C
Offered through an employer-established benefit plan
An insured covered under a $1 million accidental death and dismemberment policy is involved in an accident that resulted in the loss of both legs 3 days after the accident. Following a lengthy hospital stay, her losses included $300,000 in medical bills, $100,000 in hospital expenses, and $10,000 in loss of income due to her inability to work. Which of the following is payable from the AD&D policy?
A
$410,000 for medical expense, hospital expense, and loss of income and $500,000 for the dismemberment
B
The capital sum of $500,000 for dismemberment
C
Medical expense reimbursement of $300,000
D
The principal sum of $1 million for double dismemberment
D
The principal sum of $1 million for double dismemberment
A typical hospital indemnity insurance plan provides payment of benefits in which of the following ways?
A
An amount equal to the insured’s deductible and coinsurance amounts
B
A percentage of benefits based on a written schedule of common procedures and treatments
C
As reimbursement for usual, customary and reasonable necessary medical expenses paid by the insured
D
A daily benefit based on a stated dollar amount paid to the insured without regard to the actual medical expenses
D
A daily benefit based on a stated dollar amount paid to the insured without regard to the actual medical expenses
All of the following are characteristics of dental insurance plans, EXCEPT:
A
Orthodontic care is covered immediately following the effective date of the policy
B
Purely cosmetic services are excluded from coverage
C
Deductibles and coinsurance generally apply to basic and major services
D
Cleaning and x-rays are preventive care services
A
Orthodontic care is covered immediately following the effective date of the policy
orthodontic care is provided, a probationary period typically applies and benefits are reduced for a stated period of time.
Which of the following types of coverage has a corridor deductible?
A
Major medical
B
Basic medical expense
C
Comprehensive major medical
D
Supplemental major medical
D
Supplemental major medical
All of the following are qualified medical expenses for Heath Savings Accounts, except:
A
Diagnostic charges
B
Vitamins
C
Prescriptions
D
Medical supplies
B
Vitamins
For what type of provider are services covered in or out of a network by a combination of a PPO and/or an HMO?
A
MPP
B
PPO
C
ASO
D
POS
D
POS
This type of policy covers various expenses that an insured may incur due to a routine accident or sickness.
A
Disability income
B
Dental expense
C
Long-term care
D
Medical expense
D
Medical expense
High Deductible Health Plans (HDHPs) are characterized by which of the following?
A
Once the deductible is paid, the plan pays at 100%
B
The premiums are significantly lower than other plans
C
To qualify as a HDHP, the plan must have an HSA associated with it
D
Medical expenses are available as first dollar coverage
B
The premiums are significantly lower than other plans
When an independent contractor purchased their own personal medical and dental insurance, they discovered that self-employed persons may deduct:
A
Up to 100% of the cost of health insurance, except for disability income insurance
B
Up to 50% of the cost of their medical insurance, but not dental insurance
C
Up to 50% of the cost of health insurance over the 7.5% of AGI threshold
D
Up to 100% of the cost of health insurance for themselves and their dependents
D
Up to 100% of the cost of health insurance for themselves and their dependents
Sole proprietors may deduct 100% of medical and dental expense premiums, including the amounts applicable to coverage for dependents, such as a spouse and children under age 27. The deduction is not subject to any threshold, like the 7.5% of AGI threshold.
Dental expense insurance deductibles are normally waived for all of the following, except:
A
Routine exams
B
Routine cleaning
C
Routinely paying premiums on time and in full
D
Routine preventive care
C
Routinely paying premiums on time and in full
A surgical procedure with a high level of difficulty is assigned a value and benefits for all other procedures are paid based on a percentage of that value. These benefits are determined using a:
A
Coinsurance
B
Surgical schedule
C
Relative value scale
D
Flat benefit
C
Relative value scale
A relative value scale assigns a value to a procedure with the highest level of difficulty and benefits for all other covered procedures are based on a percentage. A surgical schedule fee specifies benefit dollar limits for each covered surgical procedure.
PPO plans pay providers based on a:
A
Reimbursement basis
B
Prepaid basis determined by a primary care physician
C
Discounted fee for service negotiated in advance
D
Flat benefit determined by geographical region
C
Discounted fee for service negotiated in advance
_______________ Major Medical insurance coverage combines the features of the Basic Medical Expense policies and a Major Medical policy into a single policy and includes reimbursement for covered expenses on a ‘usual, customary, and reasonable’ basis.
A
Exclusive
B
Inclusive
C
Comprehensive
D
Intensive
C
Comprehensive
Sharon, age 64 is getting ready to file her taxes. Which of the following statements is TRUE regarding the deductibility of her personally-owned health insurance policies?
A
Unreimbursed medical expenses in excess of 7.5% of her AGI may be tax deductible
B
If her premium costs and other expenses total at least 7.5% of her income, all her medical expenses are deductible
C
If her disability income premiums total at least 7.5% of her income, the excess amount is tax deductible
D
Premiums are always deductible
A
Unreimbursed medical expenses in excess of 7.5% of her AGI may be tax deductible
The amount of unreimbursed medical and dental expenses that exceeds 7.5% of adjusted gross income may be tax deductible. Disability income premiums cannot be counted toward this deduction.
Which of the following is true of traditional commercial insurers?
A
They traditionally market reimbursement-type contracts that pay directly to the insured
B
They offer only individual plans of insurance
C
They offer only group plans of insurance
D
They traditionally market service-type contracts that pay directly to the provider of the service
A
They traditionally market reimbursement-type contracts that pay directly to the insured
All health insurance policies covering dependents of the insured must provide coverage for newborns:
A
3 months after birth
B
72 hours after birth
C
From the moment of birth
D
48 hours after birth
C
From the moment of birth
A basic medical plan provides a specified dollar limit per medical procedure as stated in the policy. This specified amount is the:
A
Suggested benefit based on the geographic region where the procedure was performed
B
Minimum benefit payable
C
Maximum benefit the policy will pay for that procedure
D
Average amount the plan will pay but could pay more
C
Maximum benefit the policy will pay for that procedure
Basic policies generally specify the benefit limit for covered expenses; either a flat dollar amount or a schedule of benefits. The benefit limit may be less than actual expenses incurred.
Which is the best description of a Limited Accident Policy?
A
It only provides coverage for a limited time after an accident
B
It provides coverage for any type of accident, but not sickness
C
It is limited in geographical scope (i.e., only in the state where it was written)
D
It provides benefits for injuries associated with specific events
D
It provides benefits for injuries associated with specific events
Comprehensive Major Medical policies provide:
A
Limited coverage
B
Specialized coverage
C
Broad coverage
D
Short-term coverage
C
Broad coverage
Which of the following is a common exclusion in a medical expense plan:
A
Loss due to Workers’ Compensation
B
Office visit expense
C
Loss due to an accident
D
Minor surgical procedure
A
Loss due to Workers’ Compensation
If an insured suffers a single dismemberment under an Accidental Death and Dismemberment (AD&D) policy, the policy will pay the:
A
Principal sum
B
Capital fund
C
Capital sum
D
Principal investment
C
Capital sum
Which of the following is considered a qualified expense from a Flexible Spending Account?
A
Amounts covered under another plan
B
Dental expenses
C
Long-term care coverage
D
Insurance premiums
B
Dental expenses
D has an accidental death and dismemberment policy with a $200,000 principal sum and a $100,000 capital sum. While mowing the lawn, D cut off a finger. How much will the policy pay?
A
$50,000
B
$100,000
C
$200,000
D
$0
D
$0
Joe suffers a broken leg while on vacation. With Joe’s HMO, he may seek medical care at which of the following?
A
The nearest emergency room
B
A military hospital
C
An approved HMO facility
D
A facility near his home, where he must return for treatment
A
The nearest emergency room
Sylvia is a participant in a Preferred Provider Organization and finds that if she opts to use a provider outside the network:
A
Her PPO will pay only if the circumstances for care were precipitated by an emergency
B
Her PPO will not pay at all
C
Her PPO will pay a reduced amount with Sylvia paying the balance
D
Her PPO will cover any charges in full
C
Her PPO will pay a reduced amount with Sylvia paying the balance
W has a health insurance policy with an 80/20 coinsurance and a $1,000 deductible. In January, W goes into the hospital for an overnight stay and incurs $900 in covered hospital expenses. How much of the $900 is W’s responsibility?
A
$180
B
$900
C
$200
D
$720
B
$900
