Module 4 Health, Disability, and Long-Term Care Insurance

Question 1

The maximum monthly benefit payment of a disability policy is affected by all of the following except

A)
the type of policy (individual or group).
B)
coordination of benefits clauses.
C)
the annual earnings of the claimant.
D)
the marital status of the claimant.

Answer 1

The answer is the marital status of the claimant. Benefit payments are mostly a function of earnings, not marital status. Individual policies are often more restrictive than group policies regarding maximum benefits. The annual earnings of the claimant are the most important factor in determining benefit payments. Coordination of benefits clauses may reduce payments if the policy coordinates with Social Security or workers’ compensation.

LO 4.5.1

Question 2

Which of the following statements regarding Medigap insurance policies is CORRECT?

Medigap Policy A is designed to help cover reimbursement of the insured’s hospital costs not covered by Medicare Part A and coinsurance not covered under Medicare Part B.
Seniors may be sold two or more Medigap policies at a time to help cover gaps in coverage under Medicare Part A and Medicare Part B.
Medigap policies must accept all applicants who apply within the first nine months of qualifying for Medicare.
A)
II and III
B)
I only
C)
I and III
D)
I, II, and III

Answer 2

The answer is Medigap Policy A is designed to help cover reimbursement of the insured’s hospital costs not covered by Medicare Part A and coinsurance not covered under Medicare Part B. Seniors may be sold only one Medigap policy at a time. Insurance companies must accept all applicants for Medigap policies who apply within the first six months of qualifying for Medicare.

LO 4.4.2

Question 3

Which of the following look-back periods on asset transfers intended to impoverish a donor for Medicaid eligibility is CORRECT?

A)
12 months
B)
1 month
C)
60 months
D)
10 years

Answer 3

The answer is 60 months. The Medicaid look-back period is 60 months. If a transfer is made during the look-back period, the donor is not eligible for Medicaid for a period equal to the amount transferred divided by the average monthly cost of nursing care in the donor’s region.

LO 4.1.2

Question 4

Germaine is 65 years old. She still has a full-time job, and her employer provides a group health plan. Which of the following statements regarding Germaine’s situation is CORRECT?

Medicare coverage would be secondary to any health insurance coverage carried by Germaine through her employer health plan.
Germaine’s employer health plan would provide her with secondary coverage to her Medicare coverage if she chooses to sign up for her employer-provided health plan and Medicare.
Medicare Part B may provide Germaine with prescription drug coverage if she chooses to sign up for Medicare coverage.
A)
I only
B)
I, II, and III
C)
III only
D)
I and II

Answer 4

The answer is I only. Medicare coverage would be secondary to any health insurance coverage carried by individuals through their employer health plans. Employer health plans would be primary in these cases and would be required to exhaust a particular benefit level before any Medicare benefit would be paid. Medicare Part D provides prescription drug coverage, not Part B.

Question 5

Because of a slowdown in business, Sarah has voluntarily changed her status from full time to part time. Before the change, she and her spouse were covered under her company group health insurance plan. Which of the following statements regarding COBRA is CORRECT?

A)
COBRA rules allow continuation of coverage in this situation for up to 36 months.
B)
COBRA rules allow continuation of coverage in this situation for up to 29 months.
C)
COBRA rules allow continuation of coverage in this situation for up to 18 months.
D)
Because her change is voluntary, COBRA rules do not apply.

Answer 5

The answer is COBRA allows continuation of coverage in this situation for up to 18 months. COBRA allows the continuation of coverage for up to 18 months when the qualifying event is a reduction in hours.

Voluntary is almost always 18 months.

Question 6

Which of the following statements regarding tax-qualified, long-term care insurance is CORRECT?

A)
Employer-paid premiums are taxable income to the employee/insured.
B)
Benefits may be included in flexible spending accounts on a tax-advantaged basis.
C)
Benefits are generally excludible from taxable income, subject to a per-day limit.
D)
Premiums paid by the policyowner are not tax deductible.

Answer 6

The answer is benefits are generally excludible from taxable income, subject to a $390 per-day limit (2022). Deductions for premiums are limited on the basis of age and adjusted gross income for taxpayers who itemize their deductions.

?

Question 7

All of the following are features of the Medicaid program except

A)
potential beneficiaries must pass an asset test in order to be eligible.
B)
it includes a provision defining a lookback period of 60 months for assets transferred to others (usually adult children) designed to impoverish the donor to become eligible.
C)
it is administered solely by the federal government.
D)
it provides health care benefits for the indigent and impoverished.

Answer 7

C

The Medicaid program is administered by each individual state. The states remit payments to eligible participants and are partially reimbursed by the federal government.

Question 8

Evelyn recently turned 65 and signed up for Medicare parts A, B, and D. She is concerned with how she’ll pay for the deductibles and copayments. Which policy would you recommend she purchase to manage those expenses?

A)
An HSA
B)
A Medicare supplement policy
C)
A supplemental insurance policy
D)
A Medicaid policy

Answer 8

The answer is a Medicare supplement policy. Medicare supplement policies are specifically designed to help manage the out-of-pocket costs not covered by original Medicare.

AKA Medigap

Question 9

In order to receive long-term care from Medicare, which of the following must be true?

The patient must have a three-day hospital stay as an admitted patient.
The patient must pay the coinsurance for the first 20 days of the stay.
The patient must enter a Medicare-approved facility within 30 days of release from the hospital.
The care must be at least at a skilled nursing care level.
A)
I and III
B)
II and IV
C)
I, II, III, and IV
D)
I, III, and IV

Answer 9

The answer is I, III, and IV. Only statement II is incorrect. Skilled nursing care essentially means that a registered nurse is available and supervises the care 24 hours a day, and the care is required by a physician. If this is the case, the first 20 days in the facility are fully paid by Medicare. The next 80 days are also covered, but with a daily coinsurance.

Question 10

A client had a partnership long-term care policy with a benefit of $175,000. The client was forced to use the policy’s entire $175,000 benefit after she was admitted to the local nursing home. The client is wondering if she will qualify for Medicaid. Her partnership long-term care policy’s benefit has been depleted, and she only has $127,000 in assets. Which of the following statements is CORRECT?

A)
She can qualify for Medicaid because she is currently living in a nursing home.
B)
She can qualify for Medicaid because she will be allowed to retain up to $175,000 in assets plus approximately $2,000.
C)
She cannot qualify for Medicaid because her total assets are not less than $90,000.
D)
She cannot qualify for Medicaid until her total assets are equal to approximately $2,000.

Answer 10

The answer is she can qualify for Medicaid because she will be allowed to retain up to $175,000 in assets plus approximately $2,000. The other statements are incorrect.

Remember, partnership long-term care policy asset limits are allowed within medicaid. Medicaid’s asset test I think is $2,000

Question 11

Luther just had knee replacement surgery. He has a comprehensive major medical plan with a $1,000 deductible, an 80% coinsurance provision, and a $5,000 maximum out-of-pocket limit. The total covered expense of the operation was $23,250, and Luther had no other medical expenses this year.

How much will Luther have to pay out of his own pocket for the operation?

A)
$6,000
B)
$5,450
C)
$5,000
D)
$4,450

Answer 11

C

$23,250 total costs
-$1000 deductible
$22,250 to be coinsured
*0.2
$4,450, you have to coinsure this amount
+$1000, but you also have to pay the deductible
Total MOOP Would be
$5,450, but you have a stated MOOP limit of $5,000, so the answer is C.

Question 12

When evaluating the appropriateness of long-term disability coverage for clients, planners should focus on which of the following?

A)
Whether the benefit term matches the client’s work-life expectancy
B)
All of these
C)
The definition of disability
D)
An appropriate elimination period and benefit amount

Answer 12

All

The answer is all of these. In addition to these factors, planners should ensure that the policy covers both sickness and accidents, that the client has emergency funds sufficient to cover the elimination period plus 30 days (because benefits will be paid in arrears), that the policy is noncancelable or guaranteed renewable, and that the premium is competitive.

Question 13

Albert is a full-time employee of the ABC Company. ABC has 18 full-time employees, eight part-time employees, and it provides a group health plan for its full-time employees. This year, Arthur turns 65 and voluntarily terminates his employment with ABC in order to retire. Assuming Arthur was covered by the ABC health plan when he retired, which of the following statements regarding Arthur’s eligibility for COBRA continuation coverage is CORRECT?

A)
Albert is not eligible for continuation coverage because he is eligible for Medicare.
B)
Albert is not eligible for continuation coverage because he voluntarily resigned.
C)
Albert is eligible for up to 18 months of continuation coverage.
D)
Albert is not eligible for continuation coverage because ABC has fewer than 20 full-time employees.

Answer 13

Albert is eligible for up to 18 months of continuation coverage under COBRA. Termination of employment—including voluntary resignation and retirement—is a qualifying event for purposes of COBRA, as is becoming eligible for Medicare. Each of ABC’s eight part-time employees counts as half an employee for purposes of the 20-employee rule, so ABC is subject to the COBRA requirements.

Question 14

Which of the following are common characteristics of preferred provider organizations (PPOs)?

Participating providers are paid on a fee-for-service basis as their services are used.
Covered individuals have financial incentives to receive treatment within the PPO.
A)
I only
B)
II only
C)
Neither I nor II
D)
Both I and II

Answer 14

The answer is both I and II. Participating providers are paid on a fee-for-service basis as their services are used, and covered individuals have financial incentives to receive treatment within the PPO.

Question 15

Which of the following is a key factor in establishing the cost of an individual disability income policy?

A)
Length of benefit period
B)
Definition of disability
C)
All of these
D)
Length of elimination period

Answer 15

The answer is all of these. All of these factors determine the price of a disability income policy. In addition, the morbidity rate for the proposed insured, the benefit amount, and the continuation provision are taken into consideration when determining the policy premium.

Question 16

Which of the following statements concerning the cost of long-term care and Medicare are CORRECT?

Medicare pays for a limited amount of skilled nursing care.
Medicare will pay 100% of the first 20 days of skilled nursing care.
After 20 days, Medicare will pay everything over a specified amount per day for 80 days of skilled nursing care.
Medicare benefits for long-term care are subject to substantial limitations.
A)
I and II
B)
II, III, and IV
C)
I, II, III, and IV
D)
I and III

Answer 16

The answer is I, II, III, and IV. All of these statements are correct. Medicare will pay for some skilled nursing care, but these benefits are subject to substantial limitations.

Question 17

Which of the following statements concerning long-term care (LTC) insurance is CORRECT?

The types of benefits provided by LTC policies include skilled nursing care, intermediate care, custodial care, home health care, and adult day care.
To qualify for favorable tax treatment, Alzheimer’s disease may not be excluded from LTC policies.
A)
II only
B)
Neither I nor II
C)
I only
D)
Both I and II

Answer 17

The answer is both I and II. There are seven basic types of services covered by the standard LTC policy, including skilled nursing care, intermediate nursing care, custodial care, home health care, assisted living, adult day care, and hospice care. To qualify for favorable tax treatment, LTC policies must have certain consumer protection features (e.g., contracts cannot exclude any specific illness, including Alzheimer’s disease).

Question 18

Which of the following statements concerning health maintenance organizations (HMOs) is CORRECT?

HMOs are generally regarded as organized systems of health care that provide a comprehensive array of medical services to its group of subscribers for a fixed monthly fee.
HMO medical providers receive a monthly fixed payment called the capitation fee for each enrolled patient.
A)
Neither I nor II
B)
I only
C)
II only
D)
Both I and II

Answer 18

Both I and II

Question 19

Which of the following individuals could be covered by Medicare?

Individuals who are at least 65 years old
Individuals who have been receiving Medicaid benefits for at least 12 months
Individuals who have been receiving Social Security disability benefits for at least 24 months
Individuals who are on kidney dialysis treatment and in end-stage renal failure
A)
I, III, and IV
B)
III and IV
C)
I, II, III, and IV
D)
I and II

Answer 19

I III IV

Question 20

Which of the following statements regarding partnership long-term care insurance is CORRECT?

Partnership long-term care programs bring together state government and private insurance companies that sell long-term care insurance.
The partnership aligns unique long-term care policies with Medicare for clients who continue to need coverage beyond their policy’s limits.
The key reason why clients may want to purchase partnership long-term care insurance is that it provides a specific dollar amount of assets that would be protected if they exhausted all of the long-term care insurance benefits and had to apply for Medicaid.
A)
I and III
B)
I, II, and III
C)
I and II
D)
II and III

Answer 20

The answer is I and III. The partnership aligns unique long-term care policies with Medicaid for clients who continue to need coverage beyond their policy’s limits.

Question 21

Which of the following statements regarding the nonforfeiture benefit rider found in a long-term care contract is CORRECT?

All LTC contracts must now offer this rider.
This rider gives the policyowner the right to a shortened benefit period.
If a policyowner has this rider and decides to surrender the policy after owning it for three months, the premiums paid will be reimbursed.
A)
I and II
B)
II only
C)
I, II, and III
D)
I and III

Answer 21

The answer is I and II. If a policyowner has a nonforfeiture rider and decides to surrender the policy after owning it for three years, the premiums paid will be available to pay for care at some time in the future.

Question 22

Jameson has attained his FRA and has been employed by ABC Inc. for 35 years. He has decided to stay employed and NOT apply for monthly Social Security cash benefits. Because his employer has reduced benefits under the employees’ group health plan, Jameson plans on applying for Medicare coverage.

Which one of the following statements regarding Jameson’s Medicare coverage is CORRECT?

A)
Since Jameson is at least 65, he is eligible for both the basic hospital and supplementary medical insurance coverages.
B)
Jameson will be entitled to basic hospital insurance benefits, but he is not eligible for supplementary medical insurance coverage.
C)
Jameson is not entitled to any Medicare insurance coverage because he is continuing to work.
D)
Jameson is entitled to Medicare insurance coverage, but his benefits will be reduced by a percentage of his compensation.

Answer 22

The answer is since Jameson is at least 65, he is eligible for both the basic hospital and supplementary medical insurance coverage. A person who is eligible for Medicare is also eligible for supplementary coverage, and continuing to work has no effect on that eligibility.

LO 4.4.1

Question 23

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

provides former employees with continuation of group health insurance for a maximum of 12 months.
allows the premium for continuation of group health insurance coverage to be as high as 102% of the existing group rate.
applies to covered employees, their spouses, and dependents.
requires employers with 20 or more full-time employees to provide for the continuation of group health insurance in the event of termination or other qualifying events.
A)
II only
B)
I, II, III, and IV
C)
II, III, and IV
D)
III and IV

Answer 23

COBRA provides for the continuation of group health insurance coverage for employees in the event of termination or other qualifying events for 18–36 months. This assumes the employee pays the premium, which can be as high as 102% of the current group rate.

Question 24

Maria has a major medical policy with a $500 deductible and an 80% coinsurance clause with a maximum out of pocket (MOOP) of $7,500. Assuming Maria has recently incurred a medical expense of $10,000, what is her out of pocket?

A)
$2,400
B)
$10,000
C)
$7,500
D)
$2,000

Answer 24

Maria will be responsible for $2,400, consisting of the deductible amount of $500 and 20% of the amount until her out of pocket is $7,500. Calculation:

$10,000 - $500 deductible = $9,500

$9,500 x 0.20 = $1,900 coinsurance

$500 deductible + $1,900 coinsurance = $2,400

LO 4.3.1

Question 25

Which of the following statements regarding business overhead expense (BOE) insurance is CORRECT?

The policy covers ongoing expenses of the business, such as rent and clerical salaries, if the owner is disabled.
Policy premiums are tax-deductible by the corporation.
The policy provides the disabled businessowner with an income stream during his disability.
The policy covers all profits lost during the owner’s disability.
A)
I only
B)
II and IV
C)
I and II
D)
I and III

Answer 25

The answer is I and II. BOE insurance neither covers profits lost during the owner’s disability nor provides replacement income during an owner’s disability. Such a policy is designed to cover the ongoing expenses of the business if the owner becomes disabled.

Question 26

When evaluating the appropriateness of long-term disability coverage for clients, planners should focus on

the definition of disability.
an appropriate elimination period and benefit amount.
whether the benefit term matches the client’s work-life expectancy.
A)
I, II, and III
B)
I and III
C)
I and II
D)
II and III

Answer 26

The answer is I, II, and III. In addition to these factors, planners should ensure that the policy covers both sickness and accidents, that the client has emergency funds sufficient to cover the elimination period plus 30 days (because benefits will be paid in arrears), that the policy is noncancelable or guaranteed renewable, and that the premium is competitive.

Question 27

When evaluating the appropriateness of long-term disability coverage for clients, planners should focus on

the definition of disability.
an appropriate elimination period and benefit amount.
whether the benefit term matches the client’s work-life expectancy.
A)
I, II, and III
B)
I and III
C)
I and II
D)
II and III

Answer 27

The answer is I, II, and III. In addition to these factors, planners should ensure that the policy covers both sickness and accidents, that the client has emergency funds sufficient to cover the elimination period plus 30 days (because benefits will be paid in arrears), that the policy is noncancelable or guaranteed renewable, and that the premium is competitive.

Question 28

Which of the following individuals meets the criteria for being chronically ill under qualified long-term care provisions?

An individual who cannot drive, hear, or dress without assistance
An individual who cannot bathe, feed himself, or dress without assistance
An individual who cannot hear, walk, or feed himself
An individual who cannot drive, walk, or dress without assistance
A)
III only
B)
II only
C)
II and IV
D)
I and III

Answer 28

The answer is II only. Qualifications under the two of six activities of daily living test includes bathing, eating, dressing, transferring from bed to chair, maintaining continence, and use of the toilet. Therefore, only the individual in Statement II would meet the chronically ill definition.

2 of the 6 Chronically ill under LTC provisions:
Bed to chair
Dress
Bathe
Shit
Feed
Eat
OR have a cognitive impairment

Not sure if Qualification for Social Security disability income comes into play here, since it’s the hardest to qualify for.

Question 29

Which of the following individuals qualify for long-term care benefits under a qualified long-term care insurance policy?

Frank, who has been unable to perform two of the six activities of daily living for 90 days
Julie, who has a substantial cognitive impairment requiring substantial assistance
A)
I only
B)
Both I and II
C)
Neither I nor II
D)
II only

Answer 29

The answer is both I and II. Both Frank and Julie are eligible for benefits because they each meet one of the criteria necessary for long-term care benefits.

Question 30

Which of the following parts of Medicare is intended to provide protection for seniors who have considerable prescription drug costs and covers both generic and brand-name drugs?

A)
Part D
B)
Part A
C)
Part B
D)
Not covered by Medicare

Answer 30

The answer is Part D. Everyone covered under Medicare Part A is eligible for Medicare Part D, regardless of current income or available assets. Medicare Part A is hospital coverage, and Medicare Part B is supplementary medical insurance.

LO 4.4.1

Question 31

Which of the following actions is NOT considered one of the six activities of daily living (ADLs)?

A)
Eating
B)
Dressing
C)
Cleaning
D)
Transferring from the bed to chair

Answer 31

The answer is cleaning. Cleaning is not one of the six ADLs.

Question 32

Cathy, her spouse Jack, and their daughter Kelly were in an automobile accident this year in which they all sustained various injuries. They were insured under Cathy’s group major medical policy that has a $250 per individual/$500 family deductible, 80/20 coinsurance, and a $5,000 individual stop-loss limit. The medical expenses were itemized as follows: Cathy—$12,000; Jack—$10,000; and Kelly—$13,000, with a $3,500 out-of-pocket maximum. Assuming no other medical expenses during the calendar year, how much of these medical expenses did the family have to pay?

A)
$15,750
B)
$6,750
C)
$3,500
D)
$3,600

Answer 32

Total expenses: $35,000 ($12,000 + 10,000 + 13,000)

Total family deductible: $500 ($250 × 2)

Coinsurance: $3,000 (3 coinsurance amounts, 20% × $5,000 per individual stop-loss limit)

The family will pay $3,500 ($3,000 coinsurance + $500 deductible)

Question 33

Which of the following statements regarding the various definitions of disability are CORRECT?

Under an own occupation definition, which is the most expensive and broadest definition of disability, an insured may be eligible for benefits even if employed in another occupation.
The Social Security definition of disability is more restrictive than those found in private disability income policies.
Under the any occupation, which is the most favorable definition of disability, an insured will only be eligible for benefits if the insured is unable to perform the duties of any occupation.
A policy containing an any occupation definition of disability is generally the least expensive.
A)
I, II, and III
B)
III and IV
C)
I, II, and IV
D)
I and II

Answer 33

Under the any occupation definition of disability, the insured is eligible for benefits only if he is unable to perform the duties of any occupation. However, this is not the most favorable definition of disability. Therefore, Statement III is incorrect.

Question 34

Which of the following are alternatives to long-term care (LTC) insurance?

Self-funding long-term care coverage
Spousal sharing of coverage
Cost reduction in home health care
Simplified policies with partial protection
A)
II and IV
B)
I and IV
C)
I, II, III, and IV
D)
I, II and III

Answer 34

All of these are alternatives to LTC insurance.

Question 35

Which of the following statements pertaining to qualifying for Social Security disability benefits is CORRECT?

To be awarded Social Security disability benefits, an individual must suffer from a mental or physical impairment that prevents her from engaging in any substantial gainful employment.
The disability must be expected to last at least 12 months or result in the death of the individual.
The disability must have been a result of a work-related injury.
A)
I and III
B)
II and III
C)
I only
D)
I and II

Answer 35

The answer is I and II. In order to qualify for Social Security disability benefits, the disability must be expected to last at least 12 months or result in the death of the individual. The disability does not have to result from a work-related injury.

Question 36

Settings
Which of the following is NOT true regarding annual deductibles?

A)
They generally must be met by covered charges incurred in one calendar year.
B)
Once the annual deductible is met in a calendar year, it does not have to be met in subsequent years.
C)
Coinsurance begins after the annual deductible is met.
D)
Claims filed within a specified time of the current plan year for expenses incurred in the previous plan year may still apply to the previous year’s deductible.

Answer 36

The answer is once the annual deductible is met in a calendar year, it does not have to bet met in subsequent years. Annual deductibles must be met each calendar year. Annual deductibles generally must be met by related expenses in the same year. Some plans allow for a carryover of the deductible to subsequent years. This is, in effect, a reward for making few claims in the first nine months of a year. Coinsurance begins after the annual deductible is met. At this point, the plan provider and the participant are responsible for their respective percentages of expenses.

Question 37

Settings
Which of the following is a commercial coverage designed to pay some of the medical expenses that the original Medicare leaves to the beneficiary?

A)
Medicare Part C
B)
Medicare Part D
C)
Medicare supplement insurance
D)
Medicare and employer group coverage

Answer 37

The answer is Medicare Supplement insurance. A Medicare Supplement insurance (Medigap) policy, sold by private companies, can help pay some of health care cost that Medicare does not cover, like copayments, coinsurance, and deductibles. A Medicare Supplement policy is designed to fill the gaps in original Medicare and Parts A and B.

Question 38

Judson recently turned 75 and has been blind for two years. He has trouble walking and is unable to cook for himself. His family told him that he needs to consider moving into an assisted living facility. Judson previously purchased a tax-qualified long-term care insurance policy. After analyzing the scenario, will he be considered chronically ill and trigger the benefits of the policy?

A)
Yes, Judson is considered chronically ill, as long as he can prove to the insurance company that he is blind and unable to cook for himself.
B)
Yes, Judson is considered chronically ill. He has been unable to perform two activities of daily living for more than 90 days.
C)
No, Judson is not considered chronically ill. Sight is not considered an activity of daily living, although cooking is.
D)
No, Judson is not considered chronically ill. Neither sight nor cooking is considered an activity of daily living.

Answer 38

The answer is no, Judson is not considered chronically ill. Neither sight nor cooking is considered an activity of daily living. Therefore, Judson is not considered chronically ill, and his benefits will not be triggered.

Question 39

Which of the following are key factors affecting the overall health care costs for a retiree?

Estimated health insurance premiums
Age of retirement
Life expectancy
Inflation
A)
I, II, III, and IV
B)
I, II, and III
C)
I and IV
D)
II, III, and IV

Answer 39

Estimated health insurance premiums, estimated out of pocket costs, age of retirement, life expectancy, quality of health of the individual, and inflation are all key factors that may affect the overall health care costs for a retiree.

Question 40

Settings
Arthur is a full-time employee of the ABC Company. ABC has 18 full-time and eight part-time employees, and it provides a group health plan for its full-time employees. This year, Arthur turns 65 and voluntarily terminates his employment with ABC in order to retire. Assuming Arthur was covered by the ABC health plan when he retired, which of the following statements regarding Arthur’s eligibility for COBRA continuation coverage is CORRECT?

A)
Arthur is eligible for up to 18 months of continuation coverage.
B)
Arthur is not eligible for continuation coverage because ABC has fewer than 20 full-time employees.
C)
Arthur is not eligible for continuation coverage because he voluntarily resigned.
D)
Arthur is not eligible for continuation coverage because he is eligible for Medicare.

Answer 40

The answer is Arthur is eligible for up to 18 months of continuation coverage. Termination of employment, including voluntary resignation and retirement, is a qualifying event for purposes of COBRA, as is becoming eligible for Medicare. Each of ABC’s eight part-time employees counts as half an employee for purposes of the 20-employee rule, so ABC is subject to the COBRA requirements.

LO 4.1.1

Question 41

COBRA requires continuation of coverage for former employees and their dependents after all of the following qualifying events except

A)
the employee dies.
B)
the employee’s hours are reduced so he is no longer eligible for coverage.
C)
the employee meets the own occupation definition of disability.
D)
the employee and the employee’s spouse commence a legal separation.

Answer 41

The answer is the employee meets the own occupation definition of disability. Meeting the Social Security definition of disability, not the own occupation definition, is another qualifying event under COBRA.

Question 42

Which of these should an individual consider when trying to decide between purchasing a long-term care policy or relying on Medicaid benefits to provide for long-term care?

The quality of the care provided to private-pay patients versus the quality of the care provided to Medicaid patients
The potential loss of the family home by lien and sale in order to reimburse Medicaid for long-term care benefits provided
The availability of Medicaid beds as compared to the availability of private-pay beds
A)
I, II, and III
B)
II and III
C)
I and II
D)
I and III

Answer 42

The answer is I, II, and III. All of these items should be considered when trying to decide between purchasing a long-term care policy or relying on Medicaid benefits to provide for long-term care.

LO 4.6.2

Question 43

Which of the following statements regarding Medigap plans are CORRECT?

Medigap policies may duplicate benefits provided by Medicare.
10 approved plans are available.
A)
I only
B)
Neither I nor II
C)
Both I and II
D)
II only

Answer 43

The answer is II only. Medigap policies may not duplicate benefits provided by Medicare.

There are 10 approved Medigap plans available.

Question 44

Sherman is considering the purchase of an individual disability income insurance policy. He is especially concerned about being able to renew his coverage. Which of the following continuation provisions would provide Sherman with the greatest security for policy renewal?

A)
Noncancelable
B)
Conditionally renewable
C)
Renewable
D)
Nonrenewable

Answer 44

The answer is noncancelable. A disability income insurance policy that is noncancelable (non can) provides the greatest amount of security for the insured. When a policy is noncancelable, the insurance company guarantees the renewal of the policy for a stated period with no increase in future premiums.

Remember, Noncancelable is even stronger than guaranteed renewable.

LO 4.5.1

Question 45

When a disability income insurance application is being evaluated, which of the following correctly describes underwriting considerations?

I. Prior group coverage

II. Basic income

III. Physical health

IV. Spouse’s income

A)
I, II, and III
B)
I and III
C)
I, II, III, and IV
D)
II, III, and IV

Answer 45

The answer is I, II, and III. Underwriting will consider prior group coverage, basic income (salary, but not bonuses or overtime pay), and the individual’s health. The spouse’s income has no bearing on whether or not an individual needs additional income protection.

LO 4.5.2

Bonus question: Why does prior group coverage matter?

Question 46

Settings
Under the Health Insurance Portability and Accountability Act (HIPAA), a chronically ill person is unable to perform how many activities of daily living (ADLs) for a period of at least how many days?

A)
3 ADLs, 60 days
B)
3 ADLs, 30 days
C)
2 ADLs, 60 days
D)
2 ADLs, 90 days

Answer 46

D

Question 47

Settings
Loretta has a $200 deductible and a 20% coinsurance for her medical expense plan. Her first medical bill of the year is $1,200. Loretta will pay the $200 deductible. How much money must she pay in addition to the deductible?

A)
$800
B)
$200
C)
$240
D)
$1,000

Answer 47

200

1200 total medical
-200
1000 amount to be coinsured
*0.2 your coinsurance %
200 is your part of coinsurance (in addition to the deductible). So you will pay 400 total, but the question is phrased a specific way.

LO 4.3.1

Question 48

Which one of the following statements accurately describes a provision of the health insurance continuation coverage requirements of COBRA?

A)
Continuation coverage need not be offered to employees who are terminated involuntarily, but must be offered to employees who voluntarily terminate their employment.
B)
Employers with 20 or more full-time employees must offer continuing health care coverage to former employees and/or their dependents upon the occurrence of a qualifying event.
C)
If an employee voluntarily terminates employment, continuation coverage must be offered to the employee for 24 months after the date of termination, regardless of whether the employer still carries such coverage on remaining employees.
D)
Continuation coverage need not be offered to employees who voluntarily terminate employment if the employer typically employs fewer than 30 persons.

Answer 48

Employers with 20 or more full-time employees normally have to offer this extended health insurance coverage to terminated employees. In most cases, employees may maintain group health insurance benefits for up to 18 months after leaving work. The Department of Labor identifies several events that may allow for COBRA coverage, including voluntary or involuntary termination of the covered employee’s employment for reasons other than gross misconduct and reduced hours of work for the covered employee.

LO 4.1.1

Question 49

Which of the following single-coverage health plans qualify as a high-deductible health plan that can be used in conjunction with a health savings account in 2022?

Plan A: $1,000 deductible; $4,000 maximum out of pocket
Plan B: $2,500 deductible; $4,000 maximum out of pocket
Plan C: $3,000 deductible; $5,000 maximum out of pocket
A)
III only
B)
II and III
C)
II only
D)
I, II, and III

Answer 49

II and III

To be a SINGLE high deductible plan:
MOOP <= $7050 (2022)
Deductible >=$1400 (2022)

REMINDER MOOP LESS THAN OR EQUAL TO 7050$

For family, double both.

Question 50

Which of the following are mandatory Medicaid benefits?

Inpatient hospital services
Laboratory and x-ray
Eyeglasses
Family planning services
A)
III and IV
B)
I, II, and IV
C)
I, II, and III
D)
I and II

Answer 50

The answer is I, II, and IV. Eyeglasses are an optional Medicaid benefit.

Question 51

Which of the following statements concerning the cost of long-term care and Medicare are CORRECT?

Medicare pays for a limited amount of skilled nursing care.
Medicare will pay for the first 20 days of skilled nursing care.
After 20 days, Medicare will pay everything over a specified amount per day for 80 days of skilled nursing care.
Medicare benefits for long-term care are subject to substantial limitations.
A)
II, III, and IV
B)
I and III
C)
I and II
D)
I, II, III, and IV

Answer 51

The answer is I, II, III, and IV. Medicare will pay for some skilled nursing care, but these benefits are subject to substantial limitations. For options II and III, a hospital admission of three days is required.

LO 4.6.2

Question 52

Which of the following is NOT a type of traditional long-term care policy?

A)
Monthly limit
B)
Indemnity plans
C)
Cash plans
D)
Reimbursement

Answer 52

The answer is monthly limit. Monthly limit can be a component of all three types of plans. It is not a type of plan.

LO 4.6.1

Question 53

Which of the following services are covered by Medicare Part B?

Physicians’ services
Routine exams for eyeglasses
Drugs that cannot be self-administered
Routine foot care exams
A)
I and III
B)
I and IV
C)
I, II, and III
D)
II and IV

Answer 53

The answer is I and III. Medicare Part B does not cover routine exams for eyeglasses or foot care.

LO 4.4.1

Question 54

Which of the following statements regarding planning for long-term care expenses is CORRECT?

Medicare is one of the best ways to pay for long-term care expenses because benefits may be used for up to five years.
Medicaid planning (i.e., spending down assets to qualify for Medicaid) is an important tool that planners should use in helping their clients pursue long-term care financial goals.
A)
Both I and II
B)
II only
C)
Neither I nor II
D)
I only

Answer 54

The answer is neither I nor II. Medicare is not a good option to pay for long-term care expenses because coverage is limited, restrictive, and will only pay for skilled nursing facility care for up to 100 days per benefit period. In addition, current law makes it a misdemeanor for planners to assist clients with spend-down planning to qualify for Medicaid.

Question 54

All of the following statements regarding indemnity health insurance plans are correct except

A)
these plans are sometimes called traditional plans.
B)
these plans include neither a deductible nor a coinsurance provision but reimburse the insured according to a scheduled list of allowed costs.
C)
these plans are no longer common.
D)
these plans allow for generous limits on the amount payable for any event.

Answer 54

The answer is these plans allow for generous limits on the amount payable for any event. Plans that provide indemnity coverage impose rigid limits on the amount payable for each event.

Question 55

Which of the following is the maximum age health insurance plans must allow for coverage of adult children under the terms of the 2010 Patient Protection and Affrodable Care Act?

A)
26
B)
21
C)
24
D)
18

Answer 55

The answer is 26. The legislation currently provides that plans covering dependents must allow coverage for adult children until age 26.

Question 56

Which of the following is a possible drawback of HMO coverage?

A)
The breadth of coverage
B)
The gatekeeper provision
C)
The high deductible
D)
The focus on preventative care

Answer 56

The answer is the gatekeeper provision. Participants may be inconvenienced by having to work through a primary care physician prior to seeing a specialist. Further, if the gatekeeper receives a financial incentive for keeping costs within preset limits, she may not be motivated to refer a patient on for further care within the system.

LO 4.2.1

Question 57

Alan has a major medical policy with a $500 deductible and an 80/20 coinsurance provision. The policy also includes a maximum out-of-pocket (MOOP) of $5,000. If Alan has covered medical expenses of $8,000, how much will he have to pay toward his expenses?

A)
$5,000
B)
$6,400
C)
$2,000
D)
$2,400

Answer 57

Alan would pay $2,000. This is the $500 deductible + $1,500 coinsurance (20% of $7,500). The insurance company will only pay 100% when the deductible and Alan’s 20% share of coinsurance exceeds $5,000.

LO 4.3.1

Question 58

Harry is covered by Medicare Part B. He incurs $10,000 in medical bills for outpatient hospital services and doctor care. How much will Medicare Part B pay toward these expenses, assuming Harry has satisfied the Part B deductible?

A)
$0
B)
$2,000
C)
$10,000
D)
$8,000

Answer 58

The answer is $8,000. Medicare will pay 80% of the covered expenses after Harry has satisfied the Part B deductible.

Question 59

All of the following types of Medicaid assets generally count when calculating one’s eligibility for Medicaid except

A)
certificates of deposit.
B)
life insurance with a face amount of less than $1,500.
C)
stocks and bonds.
D)
checking and savings accounts.

Answer 59

The answer is life insurance with a face amount of less than $1,500. In addition, one motor vehicle, personal property and household belongings, and one’s primary residence, with some limitations, generally do not count when calculating eligibility for Medicaid.

Bonus Question for later:
Why would you have a life insurance policy with a face amount less than $1500?

Question 60

Noncancelable disability income insurance policies are different from guaranteed renewable disability income insurance policies because noncancelable disability income policies

A)
are less expensive than guaranteed renewable disability policies.
B)
cannot have a premium change.
C)
are not guaranteed renewable.
D)
can be canceled by the insurance company midterm.

Answer 60

The answer is cannot have a premium change. A noncancelable disability income insurance policy is a continuous term contract guaranteeing the right to renew for a specified period with a guaranteed premium. Therefore, all noncancelable disability income policies are also guaranteed renewable.

Guaranteed renewable disability income contracts allow for automatic renewal but permit the insurance company to raise the premium for an entire class of insureds. Noncancelable policies are more expensive than guaranteed renewable policies.

Question 61

Which of the following events will qualify for COBRA continuation coverage?

Divorce
Termination of employment
Death of the worker
Resigning from a job
A)
II and IV
B)
I, II, III, and IV
C)
I, II, and III
D)
I and IV

Answer 61

The answer is I, II, III, and IV. All of the events qualify for COBRA continuation coverage.

LO 4.1.1

Question 62

Which of the following is a major disadvantage of a health maintenance organization (HMO) from the perspective of the subscriber?

A)
The absence of coverage for outpatient services
B)
The inability to use providers outside the network except in emergencies
C)
The absence of a primary care physician
D)
The absence of a gatekeeper

Answer 62

The answer is the ability to use providers outside the network except in emergencies. HMOs do not generally permit the use of providers outside of the network. They feature gatekeeper provisions.

LO 4.2.1

Question 63

Which of the following should financial planners focus on when evaluating the appropriateness of long-term disability coverage for clients?

A)
The appropriate definition of disability based on the client’s needs
B)
Making sure that the benefit term matches the client’s needs
C)
All of these
D)
An appropriate elimination period and benefit amount, taking the amount of the client’s current emergency fund into consideration

Answer 63

The answer is all of these. In addition to these factors, planners should ensure that the policy covers both sickness and accidents, that the client has emergency funds sufficient to cover the elimination period plus 30 days (because benefits will be paid in arrears), that the policy is noncancelable or guaranteed renewable, and that the premium is competitive.

LO 4.5.2

Question 64

Medicare Part A provides hospital coverage. Which of the following individuals are eligible for coverage under Part A?

Joseph, 65, who is eligible to receive railroad retirement benefits but has not filed for them yet
Juan, 30, who has been disabled for four years and has received a disability check from Social Security for the past two years
Penelope, 61, who is receiving kidney dialysis treatment and is in end-stage renal failure
Anna, 72, who has just started receiving benefits from Social Security
A)
III and IV
B)
II and III
C)
I, II, and IV
D)
I, II, III, and IV

Answer 64

The answer is I, II, III, and IV. Medicare Part A covers individuals with any of these characteristics.

Question 64

All of the following statements regarding Medicaid are correct except

A)
Medicaid applies a look-back period to asset transfers designed to qualify the transferor for benefits.
B)
Medicaid is a joint federal and state health insurance program.
C)
Medicaid is available to anyone age 65 or older, regardless of their economic status.
D)
Medicaid provides coverage for long-term care, including nursing home care.

Answer 64

Explanation
The answer is Medicaid is available to anyone age 65 or older, regardless of their economic status. Medicaid provides benefits only to people who are indigent or impoverished.

LO 4.1.2

Question 65

If the insured becomes disabled, the definition of disability in the insurance contract due to bodily injury or disease before a stated age, all premiums due during the period of total disability are suspended under

A)
a disability waiver of premium rider.
B)
the grace period.
C)
a contestable clause.
D)
a forfeiture of premium clause.

Answer 65

The answer is a disability waiver of premium rider. This rider protects insureds who become disabled and are unable to pay premiums. The policy and benefits will continue as if the premiums have been paid by the premium payer.

Question 66

Which of the following individuals is NOT likely to be eligible for Medicaid?

A)
Darrell, who has been unable to work since becoming blind two years ago
B)
Carmen, who has not been able to work since losing both legs in an accident.
C)
Pam, a single mom who relies on Aid to Families with Dependent Children to help feed her family
D)
Ginny, who is over 65 and working as a manager of a retail outlet

Answer 66

The answer is Ginny, who is over 65 and working as a manager of a retail outlet. Medicaid is not age or injury related; it is lack of income related.

Question 67

A Veterans Benefit package could include any of these except

A)
compensation/pensions, educational and career assistance, and life insurance.
B)
medical, long-term care, vision, and dental.

C)
dental, long-term care, cosmetic, medical, and vision.
D)
compensation/pensions, survivor benefits, and home loan guarantees.

Answer 67

Cosmetic care is not included in a Veterans benefit package. All other answers are correct.

LO 4.6.2

Question 68

Which of the following persons are eligible for COBRA coverage?

Employee converting from full-time to part-time status
Employee terminated for incompetence
Spouses and dependents of a deceased employee
Employee no longer able to work due to permanent disability
A)
III and IV
B)
II, III, and IV
C)
I, II, III, and IV
D)
I, II, and III

Answer 68

The answer is I, II, III, and IV. All of these persons qualify for COBRA coverage. In statement II, the employee was terminated for incompetence. Therefore she would be eligible for COBRA. Had she been terminated for gross misconduct, this would not have been the case.

LO 4.1.1

Question 69

An architect wants to purchase disability income insurance. She is concerned about becoming totally disabled but also about a reduction in income if she is obliged to reduce her workload because of a less-than-total disability. To satisfy these concerns, which of the following should be included in her disability income coverage?

A)
A relation of earnings-to-insurance provision
B)
Residual disability benefits
C)
Dismemberment benefits
D)
A change-of-occupation provision

Answer 69

The answer is residual disability benefits. The architect is concerned about total disability and the risk of reduction in income due to partial disability. A residual disability benefit is usually payable in proportion to the insured’s reduced earnings as a result of a less-than-total disability—within a certain range, such as 20%–80%.

Question 69

A client has a major medical policy with a deductible of $500 per person and a 70/30 coinsurance provision. The client recently incurred $12,000 of covered medical expenses. Which of the following is the client’s responsibility with this claim?

A)
$4,100
B)
$3,950
C)
$9,100
D)
$500

Answer 69

The answer is $3,950. The client would be responsible for $3,950, consisting of the $500 deductible plus 30% of the medical expenses after the deductible, which is $3,450 (0.30 × $11,500).

LO431

Question 69

Which of the following is a type of managed care plan that is distinguished by allowing its members to receive care outside of its preferred network of doctors and hospitals?

A)
PPO
B)
POS
C)
PCP
D)
HMO

Answer 69

The answer is PPO. A PPO plan allows members to receive care outside of the network; however, an additional fee is usually incurred.

Question 70

Which of the following family coverage health plans qualify as a high-deductible health plan that can be used in conjunction with a health savings account in 2022?

Plan A: $2,000 deductible; $6,000 maximum out of pocket
Plan B: $2,600 deductible; $13,000 maximum out of pocket
Plan C: $3,000 deductible; $10,000 maximum out of pocket
A)
II only
B)
I only
C)
II and III
D)
III only

Answer 70

For 2022, a high-deductible family coverage health plan must have a deductible of at least $2,800 and a maximum out of pocket of no more than $14,100. Plan C is the only plan that meets this test.

LO 4.2.1

Question 70

Anniki purchases a disability income insurance policy for which she and Frank pay all of the premiums. She is unable to work for several months due to an accident, and she receives $10,000 in disability benefits under her policy. Which of the following statements regarding the income tax treatment of the premiums and benefits of this policy is CORRECT?

A)
The premiums are not deductible and the benefits are taxable.
B)
The premiums are not deductible and the benefits are tax free.
C)
The premiums are deductible and the benefits are taxable.
D)
The premiums are deductible and the benefits are tax free.

Answer 70

The answer is the premiums are not deductible and the benefits are tax free. The premium for an individual disability income insurance policy is a nondeductible personal expense, and the benefits are tax free.

LO 4.5.1

Question 71

Which of the following are considered triggering events that would indicate a client and planner need to evaluate health insurance coverage?

Mary reduces her employment to 25 hours per week so she can provide day care for her grandchild.
Arnold has experienced a disability, and his short-term disability is ending. His company is going to place him on long-term disability benefits. He will be surrendering his employee ID badge next week.
Susan is graduating college and is looking for a job. She is covered under her parents’ policy and turns 24 next week.
The Brights just had their first child, who had some medical complications. The baby will turn one month old next week and is still in the hospital.
A)
II and III
B)
I, II, and IV
C)
I, III, and IV
D)
I, II, III, and IV

Answer 71

The answer is I, II, and IV. Option III is incorrect because she can remain on her parents’ coverage until age 26. When she gets a job, she may want to evaluate the options. Option I means that even though Mary may be working for the same employer, group coverage usually requires 30 hours of work to qualify for coverage. Option II means that Arnold will need to utilize COBRA because he will no longer be an employee and eligible to receive subsidized coverage. Option IV means that the Brights have just one week to get their child on their health insurance or the baby will not be covered.

LO 4.3.1

Question 72

Which of the following definitions of disability is important to athletes or surgeons who use their hands or feet to engage in their occupations?

A)
Presumptive disability
B)
Social Security disability
C)
Modified own occupation
D)
Any occupation

Answer 72

The answer is presumptive disability. Presumptive disability may be extremely important for athletes or surgeons who use their hands or feet (or both) to engage in their occupation.

LO 4.5.2

Question 72

Some policies do not attempt to define disability, but base benefit payments on the percentage of income loss due to the illness or injury. All of the following are true regarding these loss-of-income policies except that they

A)
have very strict definitions of any occupation and own occupation.
B)
effectively prohibit individuals from doubling their income by collecting benefits and working full-time in a new occupation.
C)
are beneficial to own in cases of progressive diseases.
D)
are generally less costly than own occupation policies.

Answer 72

The answer is have very strict definitions of any occupation and own occupation. Definitions of own occupation and any occupation are largely irrelevant in these types of policies. These policies are more concerned with percentages of lost income, not with classifications of occupations.

Question 73

Which of the following disability income policy continuation provisions guarantees the renewal of the policy for a stated period without any increase in premium?

A)
Optionally renewable
B)
Guaranteed renewable
C)
Conditionally renewable
D)
Noncancelable

Answer 73

The answer is noncancelable. A disability income insurance policy that is noncancelable provides the greatest amount of security for the insured (at the greatest premium outlay). With this provision, the insurance company guarantees the renewal of the policy for a stated period without any increase in future premiums.

LO 4.5.1

Question 73

Which of the following types of Medicaid assets generally count when calculating one’s eligibility for Medicaid?

Checking and savings account
Life insurance with a face amount of under $1,500
Certificates of deposit
Stocks and bonds
A)
I, II, III, and IV
B)
I and II
C)
II and III
D)
I, III, and IV

Answer 73

The answer is I, III, and IV. Life insurance with a face amount under $1,500, one motor vehicle, personal property and household belongings, and one’s primary residence with some limitations generally do not count when calculating eligibility for Medicaid.

Question 73

All of the following statements regarding health insurance are correct except

A)
employer-paid health insurance premiums are a deductible business expense to the employer.
B)
individual health insurance premiums are deductible to the extent they exceed 2% of adjusted gross income.
C)
benefits are not includable in the employees’ gross income.
D)
self-employed individuals can deduct health insurance costs from their gross income for federal income tax purposes.

Answer 73

Individual health insurance premiums are deductible to the extent that they exceed 7.5% of adjusted gross income.

Question 74

Conner is a highly compensated emergency room doctor. Which of the following definitions of disability should Conner’s disability income policy contain to offer the best protection?

A)
Any occupation
B)
Modified own occupation
C)
Social Security definition
D)
Own occupation

Answer 74

The answer is own occupation. Own occupation defines disability as “the inability to engage in your own occupation.” With this definition, the insured is eligible for benefits if she is unable to perform the major duties of her own occupation, even if she can still perform in some other occupation. Based on this definition and her occupation, Conner should own a policy containing the own occupation definition of disability.

LO 4.5.2

Question 75

Which of the following statements concerning Medicare coverage and long-term care insurance needs is CORRECT?

A skilled nursing benefit for Alzheimer’s disease or mental dementia is not permitted under Medicare Part A because a patient’s condition would not be expected to improve in either case.
Medicare is inadequate for long-term care because it does not provide coverage for custodial care.
A)
Both I and II
B)
Neither I nor II
C)
II only
D)
I only

Answer 75

The answer is both I and II. Medicare provides only limited skilled nursing facility benefits and no custodial care or nursing home care benefits. The skilled nursing benefit under Medicare Part A is available if the patient meets three conditions: certification from a medical professional, admission to a hospital for three or more consecutive days, and admission to a skilled nursing facility for the same condition as the hospital stay. Overall, the patient’s condition must be expected to improve. A benefit for Alzheimer’s disease or mental dementia is not permitted under Medicare Part A because the patient’s condition would not be expected to improve in either case.

LO 4.4.1

Question 76

Which of the following statements concerning the need for long-term care insurance is CORRECT?

A skilled nursing benefit for Alzheimer’s disease or mental dementia is not permitted under Medicare Part A because a patient’s condition would not be expected to improve in either case.
Medicare is inadequate because it does not provide coverage for custodial care.
A)
Both I and II
B)
I only
C)
Neither I nor II
D)
II only

Answer 76

The answer is both I and II. A skilled nursing benefit for Alzheimer’s disease or mental dementia is not permitted under Medicare Part A because a patient’s condition would not be expected to improve in either case, and Medicare is inadequate because it does not provide coverage for custodial care.

Question 76

Which of the following disability income policy riders provide a benefit if an insured returns to work at lesser pay?

A)
The future increase option
B)
The partial disability rider
C)
The residual disability rider
D)
The social insurance substitute benefit

Answer 76

The answer is the residual disability rider. The residual disability rider provides a benefit to an insured who has returned to work at lesser pay. In order to qualify, the insured must have at least a 20% reduction in pay.

Question 77

Settings
Which of the following statements regarding Medicare is CORRECT?

Medicare coverage would be secondary to any health insurance coverage carried by individuals through their employer health plans.
Medicare Part A provides hospice care.
Medicare Part B provides for in-hospital expenses.
Medicare is a federal government health insurance plan.
A)
II and III
B)
II, III, and IV
C)
I, II, and IV
D)
I, III, and IV

Answer 77

Medicare Part A, not Part B, provides for in-hospital expenses. Medicare Part A will pay for short term respite care in hospice only if the patient is expected to recover.