Deck 9: Insuring Your Health

Question 1

Almost 14% of the population does not have health insurance.

Answer 1

True

Question 2

If Jan has Alzheimer's, she is unable to buy long-term-care insurance.

Answer 2

True

Question 3

Major medical plans supplement the basic coverage of hospital, surgical, and physicians expense insurance.

Answer 3

True

Question 4

You would have a better chance of insurance coverage for medical services not provided by the network with a preferred provider organization (PPO) than with a health maintenance organization (HMO) plan.

Question 5

The cost of workers' compensation insurance is usually paid by the employees.

Question 6

Health maintenance organizations (HMOs) provide health care to participants without requiring them to file insurance claims.

Question 7

Blue Cross/Blue Shield payments for health care services are made directly to the subscriber rather than to the hospital or physician.

Question 8

Which of the following statements regarding medical insurance costs in the United States is true?

A) Advances in medical technology have decreased medical insurance costs.
B) Health insurance does not pay for routine medical costs.
C) A poor demand-and-supply distribution of health care facilities and services has increased health care costs.
D) Increased regulation and decreased administrative costs have reduced medical insurance costs in the United States.
E) Due to the financial importance of health insurance, nearly 50% of the U.S. population has health insurance.

Question 9

Advances in medical technology, drug prescriptions, and treatments have substantially reduced the cost of health care in recent decades.

Question 10

A preferred provider organization (PPO) has characteristics of both an individual practice association (IPA) and an indemnity plan.

Question 11

Under the adjusted (modified) community rating approach to health insurance premium pricing, all policyholders in an area pay the same premium without regard to their personal health, age, gender, or other factors.

Question 12

Large employers are less likely to offer health insurance to their employees than small employers.

Question 13

Living a healthy lifestyle is an example of loss prevention and control.

Question 14

Medicare and Medicaid are administered by hospitals and physicians.

Question 15

Long-term-care insurance provides protection against the cost of extended hospital stays.

Question 16

Internal limits are constraints placed on insurance agents stipulating the level of risk for which they can write a policy.

Question 17

Generally, group insurance plans cost less than individual policies.

Question 18

An elimination period is the number of days that must pass after you meet the eligibility requirements before your policy pays the benefits.

Question 19

Employers are legally required to extend group health insurance benefits to retirees.

Question 20

Social Security disability income benefits are available only when someone is permanently unable to do any job.

Question 21

Medicare Part A provides:

A) prescription drug coverage.
B) services of physicians and surgeons.
C) inpatient hospital services.
D) home health services.
E) compensation for workers injured on the job.

Question 22

Medicare Part B covers:

A) post-hospital medical services.
B) therapy, rehabilitation, and home health care.
C) inpatient hospital services.
D) imaging, laboratory tests, and prosthetic devices.
E) dental care.

Question 23

People under the age of 65 are covered by the Medicare health insurance plan if:

A) they agree to pay a negotiated fee for medical services.
B) they have been denied health insurance because of a pre-existing condition.
C) they volunteer to pay premiums.
D) they are injured on the job or become ill through work-related causes.
E) they receive monthly Social Security disability benefits.

Question 24

The Patient Protection and Affordable Care Act (ACA) requires insurance companies to adhere to the:

A) pure community rating approach for individuals and small businesses.
B) adjusted community rating approach for individuals and small businesses.
C) same standards used by the Social Security Administration.
D) pure community rating approach for college communities.
E) cost-of-living adjustment (COLA) for individuals and small businesses.

Question 25

During the past few decades, the percentage of our income spent on health care:

A) has increased due to an aging U.S. population.
B) has decreased due to advances in medical technology.
C) has increased due to advanced demand-and-supply distribution of health care facilities.
D) has decreased due to increased regulation and decreased administrative costs.
E) has decreased due to the reduction in health care costs.

Question 26

If you are laid off, your group health insurance:

A) can be continued if the employer chooses to.
B) must be continued if you pay the premiums.
C) must be continued and your ex-employer pays the premiums.
D) is continued and is paid by Social Security.
E) is immediately terminated.

Question 27

In addition to financing medical expenses, lost income, and replacement services, a good health insurance plan incorporates:

A) Social Security benefits.
B) flexibility in insurance premium payment on the lapse of the insurance policy.
C) lifetime limited dollar insurance coverage on pre-existing conditions.
D) other means of risk reduction, such as risk avoidance and risk assumption.
E) life insurance.

Question 28

Which of the  following statements regarding private health insurance plans is true?

A) With a fee-for-service plan, the health care provider is the same as the insurer.
B) With a traditional indemnity plan, the premium cost is low if it is a high-deductible plan.
C) With a managed care plan, the employer contracts with the health care provider.
D) With a traditional indemnity plan, the insured pays 80% of the eligible health care expenses.
E) Group health insurance is a contract between pharmaceutical companies and the health care provider.

Question 29

The community rating approach to health insurance premium pricing:

A) advocates offering the Social Security Medicare program to all individuals irrespective of their age.
B) favors the government's contribution to the health savings account (HSA).
C) prohibits insurance companies from varying rates based on health status or claim history.
D) considers only medical insurance coverage from a private insurance company.
E) offers consumer-directed health plans that go one step beyond a flexible-benefit plan.

Question 30

When offering a flexible-benefit plan, most employers will set up a salary reduction agreement with an employee if the employee:

A) has paid hospitalization charges for a pre-existing condition.
B) has paid health care costs due to a lapse of insurance coverage.
C) needs additional insurance benefits.
D) does not look for ways to avoid exposure to health care loss before it occurs.
E) is injured on the job or becomes ill through work-related causes.

Question 31

Ben (age 40) pays a low ($15) co-payment each time he visits a doctor or hospital. Other than the low per-service deductible, there is very little cost sharing. However, Ben has a relatively low deductible, has no exclusions, and does not have to file insurance claims. Which of the following most likely provides Ben's health coverage?

A) Health maintenance organization (HMO)
B) Blue Cross/Blue Shield plan
C) Preferred provider organization (PPO)
D) Medicare
E) Fee-for-service indemnity plan

Question 32

One of the key goals of the Patient Protection and Affordable Care Act (ACA) is:

A) to increase the amount of Social Security taxes.
B) to reduce the number of uninsured citizens in the country.
C) to provide health care coverage to employers employing less than 50 full-time employees.
D) to underwrite the employee health care coverage on behalf of employers.
E) to penalize employers for employees' job-related illnesses or injuries.

Question 33

Which of the following is a public assistance program that provides health insurance benefits only to those who are unable to pay for health care?

A) Medicare
B) Medicaid
C) Blue Cross/Blue Shield plan
D) Point-of-service (POS) plan
E) Workers' compensation insurance

Question 34

An exclusive provider organization (EPO) is a:

A) hybrid form of health maintenance organization (HMO) that reimburses members a specified percentage of the cost.
B) managed care plan that reimburses members only when affiliated providers are used.
C) managed care plan in which subscribers receive services from physicians practicing from their own offices.
D) hybrid form of health maintenance organization (HMO) that allows members to go outside the HMO network for care.
E) prepaid hospital and medical expense plan that allows members to use nonaffiliated providers.

Question 35

Funds for Medicare benefits come from:

A) monthly payments by users directly to the health care provider.
B) the co-payment for health care services by the insured.
C) the premiums paid by the employers for the employees.
D) Social Security taxes paid by covered workers and their employers.
E) the health care provider.

Question 36

A _____ is a hybrid form of health maintenance organization (HMO) that allows members to go outside of the HMO network for care.

A) point-of-service (POS) plan
B) Blue Cross/Blue Shield plan
C) fee-for-service plan
D) traditional indemnity plan
E) group HMO plan

Question 37

_____ is a health care plan in which subscribers / users contract with the provider organization, which uses a designated group of providers meeting specific selection standards to furnish health care services for a monthly fee.

A) An indemnity plan
B) A fee-for-service plan
C) A managed care plan
D) A supplementary medical insurance plan
E) Medicare

Question 38

Medicare's supplementary medical insurance (SMI) provides health care protection beyond the basic hospital coverage for:

A) all Medicare recipients.
B) all Social Security recipients.
C) all workers' compensation insurance recipients.
D) Medicaid recipients who pay for SMI on a voluntary basis.
E) anyone age 65 or over who pays premiums on a voluntary basis.

Question 39

Which of the following statements regarding workers' compensation insurance is true?

A) The federal government is responsible for setting workers' compensation legislation and regulating the program.
B) Workers' compensation insurance includes only rehabilitation expenses.
C) Employees are required to bear half of the entire cost of workers' compensation insurance.
D) Workers' compensation insurance compensates workers who are injured on the job or become ill through work-related causes.
E) Employers who file the most claims pay the lowest premiums on the insurance coverage.

Question 40

With a traditional indemnity (fee-for-service) plan, the:

A) health care provider and the insurer are separate.
B) insurer always pays the health care provider directly.
C) lower the deductible, the lower the premium.
D) insured receives comprehensive health care services from a designated group of doctors only.
E) health care provider contracts with the insured's employee union to provide health insurance benefits.

Question 41

The maximum limit on most dental policies is often in the range of _____ per patient.

A) $1,500 to $2,500
B) $2,000 to $2,500
C) $1,000 to $2,500
D) $1,500 to $2,000
E) $3,000 to $5,000

Question 42

Government programs such as Medicare and Medicaid cover:

A) more than half of the total cost of long-term care.
B) all the costs related to long-term care.
C) less than half of the total cost of long-term care.
D) the average cost of long-term care.
E) none of the costs related to long-term care.

Question 43

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

A) Long-term-care policies do not reimburse the insured for the cost of services incurred on a day-to-day basis.
B) The maximum duration of benefits is only 1 year.
C) There is no waiting period to receive the benefits.
D) Most long-term-care insurance policies are non-renewable in nature.
E) Many policies offer inflation protection riders for an additional premium.

Question 44

_____ covers the cost of visits to a doctor's office or for a doctor's hospital visits, including consultation with a specialist.

A) Surgical expense insurance
B) Hospitalization insurance policy
C) Elective surgery insurance
D) Physicians expense insurance
E) A hospital income policy

Question 45

Which of the following changes would tend to increase the premium on a disability policy?

A) A shorter elimination period
B) Use of the "any occupation" definition of disability instead of the "own occupation" definition
C) Decreasing the benefit level to 50% from 66% of prior earnings
D) Decreasing the payment period until age 65 to a maximum of 2 years
E) Mandatory disability insurance in which the employer pays the entire premium

Question 46

An individual can collect multiple payments for the same illness or accident unless his or her health insurance policy includes a:

A) pre-existing condition clause.
B) guaranteed renewability provision.
C) coordination of benefits provision.
D) co-insurance clause.
E) stop-loss provision.

Question 47

Patrick's monthly take-home pay is $5,000. His net worth is $125,000. He estimated that he would receive Social Security benefits worth $1,000 and company disability benefits worth $2,000 if he becomes disabled. The additional amount of disability benefits that he needs to arrange for is:

A) $3,000.
B) $2,000.
C) $5,000.
D) $6,000.
E) $7,000.

Question 48

The insurance designed to help with nursing home, assisted-living community, or in-home care due to chronic illness is called:

A) Medicare.
B) a major medical plan.
C) a comprehensive major medical plan.
D) nursing home care.
E) long-term care.

Question 49

Long-term care is a term used to describe:

A) the inflation protection riders in the insurance policy.
B) the delivery of medical and personal care to persons with chronic medical conditions who are not in a hospital.
C) the coverage for a serious illness or accident that prevents an insured person from working for an extended period.
D) an extended period of hospital stay due to a serious illness or accident.
E) compensation provided to workers who are injured on the job or become ill through work-related causes.

Question 50

In order to qualify for disability insurance under Social Security, a person must be:

A) unable to carry out the duties of the current job.
B) unable to carry out the duties of any job.
C) ill for at least 3 months.
D) expected to be disabled for at least 1 month.
E) expected to be disabled for no more than 6 months.

Question 51

Michael's estimated current monthly take-home pay is $4,500. His total existing monthly disability benefits are $2,950. Michael's estimated monthly disability benefits needed are:

A) $1,550.
B) $550.
C) $2,950.
D) $7,450.
E) $4,500.

Question 52

The _____ represents the initial amount that's not covered by a health insurance policy and thus must be paid by the insured.

A) deductible
B) stop-loss provision
C) co-payment
D) premium
E) internal limit

Question 53

Disability income policies usually have a(n) _____, which is a time delay from the date of the issuance of the policy until benefit privileges are activated.

A) waiting period
B) probationary period
C) elimination period
D) internal limit period
E) outer limit period

Question 54

In the pure community rating approach to health insurance premium pricing, all policyholders in an area pay:

A) a premium equal to the premium payable to the federal or state insurance exchange for a similar insurance policy.
B) premiums based on their family size, where they live, whether they use tobacco, and their age.
C) the same premium without regard to their personal health, age, or gender.
D) the premium as a contribution to a community pool of funds and utilize it on as-needed basis.
E) premiums at varied rates based on their health status or claim history.

Question 55

Under the Patient Protection and Affordable Care Act (ACA), family health care insurers must allow parents to retain their children on their health insurance policies up to the age of:

A) 18.
B) 21.
C) 24.
D) 26.
E) 30.

Question 56

One drawback of long-term-care insurance is its:

A) high annual premiums.
B) overlap with Medicare.
C) inability to cover custodial care.
D) short duration.
E) nonrenewability clause.

Question 57

Which of the following statements regarding the Patient Protection and Affordable Care Act (ACA) is true?

A) The ACA eliminates lifetime limits on total health care insurance payments by insurers.
B) The ACA limits the total number of surgeries for the insurers.
C) The ACA requires employers to reimburse the cost of hospital stays of the insured.
D) The ACA decides the insurance payments for dependents.
E) The ACA provides major medical insurance with low deductibles to protect against catastrophic illnesses.

Question 58

Activities of daily living (ADLs) are important in determining _____ for long-term-care insurance.

A) type of care
B) services covered
C) the waiting period
D) eligibility
E) benefit duration

Question 59

A coordination of benefits provision in a health insurance policy _____ by collecting benefits from more than one policy.

A) prohibits collecting more than 100% of covered charges
B) allows the collection of only 75% of covered charges
C) prohibits collecting more than 80% of covered charges
D) allows the collection of only 50% of covered charges
E) allows the collection of 200% of covered charges

Question 60

A policy provision ensuring continued insurance coverage for the insured's lifetime as long as the premiums continue to be paid is known as:

A) a policy exclusion.
B) co-insurance.
C) a co-payment.
D) benefits duration.
E) guaranteed renewability.

Question 61

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
[ Men | Women ] are more likely to need long-term care.

Question 62

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Your health insurance will usually pay [ the same | less ] for mental health problems compared to physical problems.

Question 63

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Medicare [ hospital | supplemental medical ] insurance requires those covered to pay a monthly premium.

Question 64

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
All Medicare recipients are eligible for [ Part C | Part D ].

Question 65

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
In the past, one complaint about health maintenance organizations (HMOs) was that [ the cost was expensive | members couldn't always choose their physicians ].

Question 66

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Expenses for accidental damage to natural teeth [ are | are not ] normally covered under standard surgical expense and major medical policies.

Question 67

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
About [ 21% | 39% ] of those under the age of 35 do not have health insurance.

Question 68

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Your health insurance policy stipulates that you will pay the first $500 of your health care expenses for the year. This is an example of a [ deductible | co-payment ].

Question 69

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
[ Custodial | Intermediate ] care is provided when the patient needs medical attention or supervision but not the constant attention of a medical professional.

Question 70

The purchasing power of income from a long-term disability policy is protected by:

A) the Patient Protection and Affordable Care Act (ACA).
B) the cost-of-living adjustment (COLA) provision.
C) Medicare benefits.
D) Social Security income.
E) the health reimbursement account (HRA).

Question 71

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Most commonly, the deductible in a health insurance policy is on a [ calendar-year | per-incident ] basis.

Question 72

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Surgical expense insurance will pay for cosmetic surgery [ if so desired by the insured  | if deemed medically necessary ].

Question 73

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
The average age of the American population is [ decreasing | increasing ].

Question 74

Which of the following statements about disability income insurance is true?

A) Most individual disability income policies pay a fixed percentage of gross income.
B) Any disability stemming from an illness or injury that occurs during the probationary period is covered.
C) Typical waiting periods for disability insurance range from 30 days to a year.
D) Policies with a guaranteed renewability provision are generally more expensive initially than noncancelable policies.
E) Typical probationary periods for disability insurance range from 90 days to a year.

Question 75

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Traditional indemnity policies reimburse the insured based on the [ amount charged | usual, customary, and reasonable (UCR) charges ] for the medical services received.

Question 76

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
The most popular type of health maintenance organization (HMO) is the [ group HMO | individual practice association ( IPA) ].

Question 77

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
Unhealthy lifestyles contribute to more than [ 40%  | 60% ] of all diagnosed illnesses.

Question 78

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
When purchasing a long-term-care policy, the [ guaranteed renewability | optional renewability ] provision is recommended.

Question 79

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
A [ flexible spending account (FSA) | health savings account (HSA) ] is a tax-free savings account-funded by employees, employers, or both-to spend on routine medical costs.

Question 80

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
The Patient Protection and Affordable Care Act (ACA) requires [ insurers to spend at least 50% of premiums on claims | all health insurance plans to cover pre-existing conditions ].