Medical Expense Insurance Quiz

Questions and Answers

Which of the following types of health coverage frequently uses a deductible?

Medicare

Short-term health insurance

Major Medical policy (correct)

Critical Illness plan

Which of the following situations does a Critical Illness plan cover?

Heart Attack

Broken Arm

Stroke

Leukemia (correct)

What do Major Medical policies typically contain?

deductible and coinsurance

What is the first portion of a covered Major Medical insurance expense that the insured is required to pay called?

initial deductible Signup and view all the answers

Which statement BEST describes the intent of a Coinsurance clause in a Major Medical policy?

Discourages overutilization of the insurance coverage Signup and view all the answers

How much will the insured pay if they have a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause for $15,000 in expenses?

$7,000 Signup and view all the answers

If J has a Major Medical policy with a $2,000 deductible and an 80/20 Coinsurance clause, how much would they pay for a $10,000 bill?

$3,600 Signup and view all the answers

What is the MAXIMUM C will pay for covered medical expenses of $2,000 with an 80/20 Coinsurance clause and a $400 deductible?

$720 Signup and view all the answers

How much will Q be responsible for paying with a $100 deductible and 80/20 Coinsurance for a $10,100 bill?

$2,100 Signup and view all the answers

How will the insurer likely consider T's condition noted on the application 2 months prior to applying for health insurance?

pre-existing condition which may not be covered for one year Signup and view all the answers

All of the following statements about Major Medical benefits are true EXCEPT?

Benefits have no maximum limit Signup and view all the answers

A Health Reimbursement Arrangement MUST be established by whom?

the employer Signup and view all the answers

Study Notes

Major Medical Insurance

Major Medical policies typically have a deductible and coinsurance.
Benefits begin to be paid only after the deductible is satisfied.
The initial portion of a Major Medical expense the insured pays is termed the initial deductible.

Coinsurance Clause

The main purpose of the Coinsurance clause is to discourage overutilization of health insurance coverage.
It requires the insured to share in the cost of claims, promoting responsible use of services.

Deductibles and Payments

Insureds must pay the initial deductible before coverage applies.
The insured is responsible for a percentage (e.g., 20%) of the remaining medical expenses after the deductible is met.

Sample Calculations

An insured with a $5,000 deductible and 80/20 coinsurance facing $15,000 in expenses pays $7,000 ($5,000 + 20% of $10,000).
An insured with a $2,000 deductible and 80/20 coinsurance facing a $10,000 bill pays $3,600 ($2,000 + 20% of $8,000).
Maximum out-of-pocket for an insured with an 80/20 coinsurance and $400 deductible for $2,000 in expenses is $720.

Pre-existing Conditions

Conditions noted on an application may be considered pre-existing and could be excluded from coverage for one year.

Policy Limits

Major Medical benefits generally have a maximum limit, contrary to some common misconceptions that they are unlimited.

Health Reimbursement Arrangement (HRA)

HRAs must be established by the employer, and funds must come from the employer as part of employee health benefits.

Description

Test your knowledge on medical expense insurance with this quiz. Covering essential topics such as major medical policies and critical illness plans, this quiz consists of 10 focused questions. Perfect for students and professionals in the healthcare field.