Medical Expense Insurance Chapter 7

Questions and Answers

Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n)

Copayment

Out of pocket provision

Stop-loss provision

Deductible (correct)

All of the following are qualifications for establishing a health savings account (HSA) EXCEPT

Enrolled in a health plan that limits out of pocket expenses

Be under the age of 65 (not enrolled in Medicare)

Enrolled in a health plan with a prescription drug benefit (correct)

Enrolled in a high deductible health plan

All of these are characteristics of a major medical expense policy EXCEPT

Elimination periods (correct)

Large benefit maximums

Coinsurance

Deductibles

Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance?

Hospital indemnity Signup and view all the answers

An indemnity plan

Provides the insured a specific dollar amount for services Signup and view all the answers

Which of the following statements is NOT true regarding a Critical Illness Plan?

Coverage is limited to a single devastating disease Signup and view all the answers

What is the tax liability for employer contributions in Health Savings Accounts (HSA's)?

No tax payment needed Signup and view all the answers

Low frequency diseases can be exclusively covered by what kind of health insurance policies?

Limited policies Signup and view all the answers

A policyholder has a major medical plan with an 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay?

$140 Signup and view all the answers

Medical Expense Insurance would cover

An injury occurring at the insured's residence Signup and view all the answers

An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured have to pay?

$5,000 Signup and view all the answers

Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have?

Calendar-year deductible Signup and view all the answers

Kim has health insurance with a deductible of $500 and an 80/20 coinsurance. How much will she pay if she incurs a loss of $1,500?

$700 Signup and view all the answers

A pharmacy benefit covers prescription drugs derived from a list called a(n)

Drug formulary Signup and view all the answers

Major Medical expense plans provide coverage for each of the following EXCEPT

Work-related injuries Signup and view all the answers

Who is the individual paid on a fee-for-service basis?

Provider Signup and view all the answers

Distributions from a Health Savings Account (HSA) for qualified medical expenses are

tax-free Signup and view all the answers

The focus of major medical insurance is providing coverage for

medical and hospitalization expenses Signup and view all the answers

An example of elective cosmetic surgery would be

removing excess fat from an insured's waistline Signup and view all the answers

All of the following plans allow for employee contributions to be taken on a pre-tax basis EXCEPT

Non-qualified retirement plans Signup and view all the answers

Study Notes

Medical Expense Insurance Key Concepts

A deductible is a specific amount that must be paid out-of-pocket by the insured before insurer benefits kick in.
Qualifications for a Health Savings Account (HSA) include being enrolled in a high deductible health plan and being under age 65, but not in a plan with a prescription drug benefit.
Major medical expense policies are characterized by large benefit maximums, deductibles, and coinsurance; they do not include elimination periods.
Hospital indemnity coverage pays a daily amount for hospitalization directly to the insured, regardless of other health insurance coverage.
An indemnity plan provides a specific dollar amount for services rather than paying both the insured and healthcare provider directly.
Critical Illness Plans pay a lump sum upon diagnosis of specified illnesses, have insurer-defined covered conditions, and are not limited to one devastating disease.
Employer contributions to HSAs are not taxable, providing a tax advantage for employees.
Limited policies specifically cover low frequency diseases.
In a major medical plan with an 80%/20% coinsurance after a deductible, if the insured incurs a $175 bill, the insurer pays $140 (80% of $175).
Medical Expense Insurance covers injuries that occur at the insured's residence, among other scenarios, except for those caused by war or elective surgeries.
With a stop-loss limit of $5,000 and other specified terms, the insured would pay $5,000 total from covered losses of $25,000.
A calendar-year deductible is required before benefits are available in a given year.
Given a loss of $1,500 with a $500 deductible and 80/20 coinsurance, the insured pays a total of $700.
A drug formulary lists prescription drugs covered under a pharmacy benefit plan.
Major Medical expense plans do cover medically necessary expenses but not work-related injuries.
Providers are the individuals paid on a fee-for-service basis for medical services rendered.
Distributions from an HSA for qualified medical expenses are tax-free, providing a financial benefit to the insured.
The primary focus of major medical insurance is to cover medical and hospitalization expenses.
An example of elective cosmetic surgery is removing excess fat from an individual's waistline.

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Test your knowledge with flashcards on Medical Expense Insurance from Chapter 7. This quiz covers key terms such as deductibles, copayments, and qualifications for health savings accounts. Perfect for students looking to reinforce their understanding of health insurance concepts.