Health Insurance Concepts Chapter 3

Questions and Answers

What is Basic Medical Expense Insurance?

Has higher benefit limits than Major Medical Insurance

Has lower benefit limits than Major Medical insurance (correct)

Is more expensive than Major Medical insurance

Is only available for emergencies

To establish a health reimbursement arrangement (HRA), it must be established by the employer.

True

Which type of health coverage frequently uses a deductible?

Major Medical policy (correct)

Hospitalization Expense Policy

Surgical Expense Policy

Basic Medical Expense Insurance

To qualify for a Health Savings Account, what type of plan must one be enrolled in?

high-deductible health plan Signup and view all the answers

Basic hospital and surgical policy benefits are usually higher than the actual expenses incurred.

False Signup and view all the answers

How much will the insured be responsible to pay with $11,000 in covered medical expenses if the plan has a $1,000 deductible and an 80/20 Coinsurance clause?

$3,000 Signup and view all the answers

Which statement best describes dental care indemnity coverage?

Services are reimbursed after insurer receives the invoice Signup and view all the answers

Which of the following services is NOT covered under a hospitalization expense policy?

Surgeon’s fees Signup and view all the answers

For which of the following expenses does a basic hospital policy pay?

Hospital room and board Signup and view all the answers

What determines the claim M is eligible for under a basic Hospital/Surgical Expense policy?

Determined by the terms of the policy Signup and view all the answers

Major medical policies typically contain a deductible and coinsurance.

True Signup and view all the answers

What is a characteristic of preferred provider organizations?

Discounted fees for the patient Signup and view all the answers

Which of the following costs would a basic hospital/surgical policy likely cover?

Surgically removing a facial birthmark Signup and view all the answers

Which health insurance coverage is best suited for meeting the expenses of catastrophic illness?

Major Medical Signup and view all the answers

How much will Q be responsible for paying on a Major Medical claim of $10,100 with a $100 deductible and 80/20 coinsurance?

$2,100 Signup and view all the answers

What do comprehensive major medical policies usually combine?

Major medical with basic hospital/surgical coverage Signup and view all the answers

Which phrase refers to the fees charged by a healthcare professional?

Usual, customary, and reasonable expenses Signup and view all the answers

Study Notes

Health Insurance Terminology

Basic Medical Expense Insurance: Offers lower benefit limits compared to Major Medical insurance.
Health Reimbursement Arrangement (HRA): Must be established by the employer for employees.
Deductible Usage: Major medical policies commonly require the payment of a deductible by the insured.

Health Savings Account (HSA) Criteria

To qualify for a tax-exempt HSA, the individual must enroll in a high-deductible health plan.
Cannot be covered by any other health insurance (except for specific types like dental or vision), cannot be eligible for Medicare, and cannot be claimed as a dependent.

Hospital and Surgical Policies

Basic hospital and surgical policy benefits tend to be lower than the actual expenses incurred during treatment.
Hospitalization Expense Policy: Excludes certain expenses like surgeon's fees, which are not covered under this type of policy.
Benefits under a basic hospital policy can include hospital room and board.

Medical Policy Claims

Claim eligibility for basic hospital/surgical expense policy is determined by the terms of the policy itself.
Major medical policies typically involve a deductible and include a coinsurance structure.

Insurance Payout Examples

For an insured with $11,000 in covered medical expenses under a major medical plan with a $1,000 deductible and an 80/20 coinsurance, the insured's responsibility is $3,000.
In another example, if an individual is hospitalized for 3 days with a bill of $10,100 under a major medical policy that has a $100 deductible and 80/20 coinsurance, they would be responsible for $2,100.

Types of Insurance Plans

Preferred Provider Organizations (PPOs): Characterized by discounted fees for patients when they use specific network providers.
Comprehensive major medical policies often combine elements of both major medical coverage and basic hospital/surgical coverage.

Dental and Surgical Expenses

Dental care indemnity coverage typically operates on a reimbursement basis after the insurer receives the invoice for services rendered.
Policies likely cover expenses such as surgically removing a facial birthmark as part of their benefits.

Key Terms

Usual, Customary, and Reasonable Expenses: Refers to the fees charged by healthcare professionals for their services.

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Description

Test your knowledge on key concepts of health insurance with these flashcards from Chapter 3. Learn about basic medical expense insurance, health reimbursement arrangements, and deductible policies in major medical coverage. Perfect for students seeking to understand essential insurance terms.