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Questions and Answers
How much will the insured be responsible to pay with $11,000 in covered medical expenses assuming a $1,000 deductible and an 80/20 Coinsurance clause?
How much will the insured be responsible to pay with $11,000 in covered medical expenses assuming a $1,000 deductible and an 80/20 Coinsurance clause?
3000
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
- Surgically removing a facial birthmark (correct)
- Cosmetic surgery
- Dental work
- Routine check-ups
Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?
Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?
- Funds can carry over to next year
- Employee funds the HRA entirely (correct)
- Utilized for out-of-pocket medical expenses
- HRA plans are employer-funded
Which of the following phrases refers to the fees charged by a healthcare professional?
Which of the following phrases refers to the fees charged by a healthcare professional?
If J is hospitalized and receives a bill for $10,000, how much would J pay with a $2,000 deductible and an 80/20 Coinsurance clause?
If J is hospitalized and receives a bill for $10,000, how much would J pay with a $2,000 deductible and an 80/20 Coinsurance clause?
Which statement BEST describes the intent of a Coinsurance clause in a Major Medical policy?
Which statement BEST describes the intent of a Coinsurance clause in a Major Medical policy?
To qualify for a tax-exempt Health Savings Account, what must the individual be enrolled in?
To qualify for a tax-exempt Health Savings Account, what must the individual be enrolled in?
Major Medical policies typically contain a deductible and coinsurance.
Major Medical policies typically contain a deductible and coinsurance.
What BEST describes a Hospital Indemnity policy?
What BEST describes a Hospital Indemnity policy?
What defines usual, customary, and reasonable (UCR) charges?
What defines usual, customary, and reasonable (UCR) charges?
Basic Hospital and Surgical policy benefits are lower than the actual expenses incurred.
Basic Hospital and Surgical policy benefits are lower than the actual expenses incurred.
How much will the insured have to pay if $15,000 in covered medical expenses are incurred with a $5,000 deductible and an 80/20 Coinsurance clause?
How much will the insured have to pay if $15,000 in covered medical expenses are incurred with a $5,000 deductible and an 80/20 Coinsurance clause?
What would be this family's out-of-pocket medical expenses for 2013 if their Hospital/Surgical Expense policy was issued with a $500 deductible and a limit of four deductibles per calendar year?
What would be this family's out-of-pocket medical expenses for 2013 if their Hospital/Surgical Expense policy was issued with a $500 deductible and a limit of four deductibles per calendar year?
In order to establish a Health Reimbursement Arrangement (HRA), it must be established by whom?
In order to establish a Health Reimbursement Arrangement (HRA), it must be established by whom?
All of the following statements about Major Medical benefits are true EXCEPT
All of the following statements about Major Medical benefits are true EXCEPT
What does a major medical policy typically provide?
What does a major medical policy typically provide?
What do comprehensive Major Medical policies usually combine?
What do comprehensive Major Medical policies usually combine?
In the case of a heart condition that was concealed on an insurance application, what is likely to occur when a claim is submitted?
In the case of a heart condition that was concealed on an insurance application, what is likely to occur when a claim is submitted?
All of the following are limited benefit plans EXCEPT
All of the following are limited benefit plans EXCEPT
What does a Basic Medical Expense policy cover in terms of hospitalization?
What does a Basic Medical Expense policy cover in terms of hospitalization?
Match the following health coverage types with their descriptions:
Match the following health coverage types with their descriptions:
What is the provision in a Major Medical policy that requires the insured to pay part of the costs?
What is the provision in a Major Medical policy that requires the insured to pay part of the costs?
What does a Basic Hospital policy typically pay for?
What does a Basic Hospital policy typically pay for?
Which service is NOT covered under a hospitalization expense policy?
Which service is NOT covered under a hospitalization expense policy?
How much will Q be responsible for paying on a claim amounting to $10,100 with a $100 deductible and 80/20 coinsurance?
How much will Q be responsible for paying on a claim amounting to $10,100 with a $100 deductible and 80/20 coinsurance?
What is the purpose of deductibles in health policies?
What is the purpose of deductibles in health policies?
What does the Carryover provision allow in health insurance?
What does the Carryover provision allow in health insurance?
Which health insurance coverage is BEST suited for catastrophic illness expenses?
Which health insurance coverage is BEST suited for catastrophic illness expenses?
What is the intent of a Stop Loss provision in Major Medical Expense policies?
What is the intent of a Stop Loss provision in Major Medical Expense policies?
Under a Health Reimbursement Arrangement (HRA), reimbursements may be tax-free.
Under a Health Reimbursement Arrangement (HRA), reimbursements may be tax-free.
Which medical expense is NOT covered by Cancer insurance?
Which medical expense is NOT covered by Cancer insurance?
How will the insurer likely consider a condition treated prior to applying for a health insurance policy?
How will the insurer likely consider a condition treated prior to applying for a health insurance policy?
What is an example of an internal limit in health insurance?
What is an example of an internal limit in health insurance?
What type of policy provides coverage only for specific illnesses like cancer or stroke?
What type of policy provides coverage only for specific illnesses like cancer or stroke?
How much maximum will C pay if the covered medical expenses are $2,000 with an 80/20 coinsurance clause and a $400 deductible?
How much maximum will C pay if the covered medical expenses are $2,000 with an 80/20 coinsurance clause and a $400 deductible?
Which of the following healthcare services is typically NOT covered?
Which of the following healthcare services is typically NOT covered?
Which of these expenses can an individual use their medical flexible spending account to pay for?
Which of these expenses can an individual use their medical flexible spending account to pay for?
Which situation does a Critical Illness plan cover?
Which situation does a Critical Illness plan cover?
Which statement is NOT true regarding health insurance policies?
Which statement is NOT true regarding health insurance policies?
What is the amount M will receive in payment for a $2,200 claim with a $200 flat deductible and an 80% Coinsurance clause?
What is the amount M will receive in payment for a $2,200 claim with a $200 flat deductible and an 80% Coinsurance clause?
Which individual health insurance policy provides the broadest protection?
Which individual health insurance policy provides the broadest protection?
What is a characteristic of Preferred Provider Organizations (PPOs)?
What is a characteristic of Preferred Provider Organizations (PPOs)?
Basic Medical Expense insurance has lower benefit limits than which type of insurance?
Basic Medical Expense insurance has lower benefit limits than which type of insurance?
Which types of health coverage frequently use a deductible?
Which types of health coverage frequently use a deductible?
How is M's claim eligibility determined under a basic Hospital/Surgical Expense policy?
How is M's claim eligibility determined under a basic Hospital/Surgical Expense policy?
What describes dental care indemnity coverage?
What describes dental care indemnity coverage?
What is the first portion of a covered Major Medical insurance expense that the insured must pay called?
What is the first portion of a covered Major Medical insurance expense that the insured must pay called?
What must the Health Reimbursement Arrangement (HRA) be established by?
What must the Health Reimbursement Arrangement (HRA) be established by?
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Study Notes
Major Medical Insurance Basics
- An insured with a $1,000 deductible and an 80/20 coinsurance on $11,000 in expenses is responsible for a total of $3,000.
- Major Medical policies typically include both a deductible and coinsurance provisions.
Coverage and Policies
- Basic Hospital/Surgical policies usually cover expenses like the surgical removal of a facial birthmark.
- Health Reimbursement Arrangements (HRA) are employer-funded and must be established by the employer, contrary to being funded by employees.
Cost Structures
- Usual, customary, and reasonable (UCR) charges are defined as the maximum allowance for reimbursement by insurers.
- Deductibles in health policies serve to limit overutilization of services.
Claims and Payments
- An individual with an 80/20 coinsurance and a $2,000 deductible incurs $10,000 in medical expenses, resulting in $3,600 paid out-of-pocket.
- Upon incurring $15,000 in expenses with a $5,000 deductible, the insured pays $7,000.
Specific Provisions
- Coinsurance in Major Medical policies is designed to discourage excessive use of coverage.
- The Stop Loss provision limits an insured's total out-of-pocket expenses.
Defined Health Coverage Types
- Major Medical insurance is best for catastrophic illness expenses due to its broad coverage.
- Dread Disease Insurance offers coverage for specific illnesses such as cancer and stroke.
Policy Limits and Exclusions
- Basic Hospital/Surgical policies offer lower benefits compared to Major Medical coverage, and they are limited in terms of expenses.
- Health care services that are experimental or investigative are typically not covered under comprehensive Major Medical policies.
Flexible Spending Accounts
- Medical flexible spending accounts can be used to cover expenses such as prescription drugs.
- Health Savings Accounts require enrollment in a high-deductible health plan (HDHP).
Indemnity and Coverage Terms
- Dental care indemnity plans reimburse after the receipt of invoices for services.
- Basic Medical Expense insurance provides limited benefits less than those of Major Medical insurance.
Claims Determination
- Claims under basic Hospital/Surgical policies are determined by the specific policy terms.
- A Major Medical policy's first portion of a covered expense that the insured must pay is known as the initial deductible.
Exclusions in Coverage
- Life insurance policies are considered not limited benefit plans, unlike policies for specific health issues (e.g., cancer).
- Cancer insurance does not cover conditions unrelated to cancer, such as arthritis.
Costs Associated with Hospitalization
- Major Medical policies will cover hospitalization expenses, with an example showing a total responsibility of $2,100 after applying deductibles and coinsurance.
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