Medical Expense Insurance Exam
Questions and Answers 2023 with
complete solution
A fee for service health insurance plan will normally cover
vitamins and natural remedies
cosmetic procedures
gym membership
a disease Answer- a disease
Low frequency diseases can be exclusively covered by what kind of health insurance
policies?
Limited policies
Blanket policies
Employer policies
Restricted policies Answer- Limited policies
All of the following plans allow for employee contributions to be taken on a pre-tax basis
EXCEPT
Section 125 Plan
Premium Only Plan
Cafeteria Plan
Health Reimbursement Arrangement Plan Answer- Health Reimbursement
Arrangement Plan
A health insurance policy will typically cover
injuries obtained from war
elective cosmetic surgery
preventative health services
work related injuries Answer- preventative health services
Medical Expense Insurance would cover
an injury occurring at the insured’s residence
an injury occurring at work
an injury caused by war
elective surgeries Answer- an injury occurring at the insured’s residence
The elimination period under a hospital indemnity plan is
the period in which pre-existing conditions are not taken into consideration
the period in which all deductibles are eliminated
the specified number of days after an insurance policy’s issue date during which
coverage is not afforded for sickness
the specified number of days an insured must wait before becoming eligible to receive
benefits for each hospitalization Answer- the specified number of days an insured must
wait before becoming eligible to receive benefits for each hospitalization
Which type of coverage pays an amount per day for hospitalization directly to the
insured regardless of the insured’s other health insurance?
MEWA
Mutual
Group
Hospital indemnity Answer- hospital indemnity
An indemnity plan
pays both the insured and health care provider
provides the insured a specific dollar amount for services
pays the health care provider directly for services rendered
is typically issued as a group plan Answer- provides the insured a specific dollar
amount for services
When an insured has a major medical plan with first dollar coverage, how does this
impact the benefits paid?
No deductible payment is required
Deductible specified in the contract is payable by the insured
Insured must pay a percentage of covered losses
An initial deductible plus a percentage of the remaining covered loss is owed by the
insured Answer- No deductible payment is required
How is a health provider reimbursed if they do NOT have an agreement in place with
the insurance company?
With a contingent fee
With a scheduled fee
With a usual, customary, and reasonable fee
With a reasonably appropriate fee Answer- With a usual, customary, and reasonable
fee
“Maximum benefits” refers to the
upper limit of the total lifetime benefits the insurance company will pay
upper limit percentage of what the insurance company will pay for coinsurance
upper limits of what the insured will pay in out-of-pocket expenses
upper limits of what an insurance company will pay for any particular claim Answerupper limit of the total lifetime benefits the insurance company will pay
An insured under a Major Medical expense plan with a zero deductible and 80/20
coinsurance provision files a $1,000 claim. How much of this claim is the insured
responsible for?
$160
$200
A fee for service health insurance plan will normally cover
vitamins and natural remedies
cosmetic procedures
gym membership
a disease
a disease
Low frequency diseases can be exclusively covered by what kind of health insurance policies?
Limited policies
Blanket policies
Employer policies
Restricted policies
Limited policies
All of the following plans allow for employee contributions to be taken on a pre-tax basis EXCEPT
Section 125 Plan
Premium Only Plan
Cafeteria Plan
Health Reimbursement Arrangement Plan
Health Reimbursement Arrangement Plan
A health insurance policy will typically cover
injuries obtained from war
elective cosmetic surgery
preventative health services
work related injuries
preventative health services
Medical Expense Insurance would cover
an injury occurring at the insured’s residence
an injury occurring at work
an injury caused by war
elective surgeries
an injury occurring at the insured’s residence
The elimination period under a hospital indemnity plan is
the period in which pre-existing conditions are not taken into consideration
the period in which all deductibles are eliminated
the specified number of days after an insurance policy’s issue date during which coverage is not afforded for sickness
the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization
the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization
Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured’s other health insurance?
MEWA
Mutual
Group
Hospital indemnity
hospital indemnity
An indemnity plan
pays both the insured and health care provider
provides the insured a specific dollar amount for services
pays the health care provider directly for services rendered
is typically issued as a group plan
provides the insured a specific dollar amount for services
When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?
No deductible payment is required
Deductible specified in the contract is payable by the insured
Insured must pay a percentage of covered losses
An initial deductible plus a percentage of the remaining covered loss is owed by the insured
No deductible payment is required
How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company?
With a contingent fee
With a scheduled fee
With a usual, customary, and reasonable fee
With a reasonably appropriate fee
With a usual, customary, and reasonable fee
“Maximum benefits” refers to the
upper limit of the total lifetime benefits the insurance company will pay
upper limit percentage of what the insurance company will pay for coinsurance
upper limits of what the insured will pay in out-of-pocket expenses
upper limits of what an insurance company will pay for any particular claim
upper limit of the total lifetime benefits the insurance company will pay
An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for?
$160
$200
$600
$800
$200
A policyholder has a major medical plan with a 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?
$35
$75
$100
$140
$140. Because the insured has previously met her deductible, the eligible expenses for a claim is the entire $175. The insurance company pays 80% of $175, or $140.
Who is the individual paid on a fee-for-service basis?
Subscriber
Administrator
Insured
Provider
Provider
A dread disease policy is considered to be a type of
hospital expense policy
group health insurance policy
major medical insurance policy
limited health insurance policy
limited health insurance policy
Which of the following statements is NOT true regarding a Critical Illness Plan?
Pays a lump sum to the insured upon the diagnosis of a critical illness
The insurer may have a list of critical illnesses they will cover
Coverage is limited to a single devastating disease
Also known as Specified Disease Plans
Coverage is limited to a single devastating disease
Which of the following is NOT included under a health benefit plan?
Major medical policy
Basic hospital policy
Hospital indemnity plan
Surgical expense policy
Hospital indemnity plan
Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs $1,500 in covered health care services. How much will her group insurance carrier pay?
$500
$900
$1,000
$1,350
$900. Insurance will pay 90% after deductible has been applied
All of these are characteristics of a major medical expense policy EXCEPT
large benefit maximums
deductibles
elimination periods
coinsurance
elimination period
A pharmacy benefit covers prescription drugs derived from a list called a(n)
administrative drug list
drug formulary
controlled substance list
generic benefit manager
drug formulary
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?
$200
$500
$700
$1,300
$700
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?
$500
$5,000
$5,400
$5,600
$5000
Major Medical expense plans provide coverage for each of the following EXCEPT
Medically necessary surgery
Diagnostic tests
Blood and urine lab screens
Work-related injuries
work-related injuries
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
Coinsurance provision
Stop-loss feature
Integrated deductible
calendar-year deductible
An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a
loss chart
benefit summary
benefit schedule
coverage menu
benefit schedule
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)
stop-loss provision
deductible
copayment
out of pocket provision
deductible
A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment
does not count as a preexisting condition
is not required to be reported on the application
indicates a preexisting condition
is irrelevant to underwriting
indicates a preexisting condition
Which of the following types of deductibles would apply a single deductible to both medical and dental insurance coverage?
Standard deductible
Combined deductible
Integrated deductible
Blended deductible
Integrated deductible
The focus of major medical insurance is providing coverage for
critical illnesses only
preventative care
medical and hospitalization expenses
doctor’s visits
medical and hospitalization expenses
Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25. How much will she have to pay if she, not having met any of her deductible, visits the doctor and receives a bill for $125?
$25.00
$50.00
$75.00
$100.00
In this situation, the insured will have to pay $25 deductible plus $25 coinsurance = $50.
All of the following are qualifications for establishing a health savings account (HSA) EXCEPT
Enrolled in a high deductible health plan
Be under the age of 65 (not enrolled in Medicare)
Enrolled in a health plan with a prescription drug benefit
Enrolled in a health plan that limits out of pocket expenses
Enrolled in a health plan with a prescription drug benefit.
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
MEWA
Blanket insurance
Dread disease insurance
Disability insurance
Dread disease insurance
What is the tax liability for employer contributions in Health Savings Accounts (HSA’s)?
Taxable as regular income to the employee
Tax-deductible expense to the employee
No tax payment needed
Taxable to the employee when they exceed 7 1/2 % AGI
No tax payment needed
A payment system for health care in which the provider is paid for each service given is called
a blanket plan
lump sum
fee-for-service
a prepaid arrangement
fee-for-service