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Chapter 9—Insuring Your Health
1. About 13% of Americans are not covered by health insurance.
a.
True
b.
False
2. Advances in medical technology, prescriptions drugs, and treatments have substantially reduced health care costs in
recent decades.
a.
True
b.
False
3. You have a better chance of choosing your own doctor with a PPO than with an HMO.
a.
True
b.
False
4. Blue Cross/Blue Shield provides prepaid health care to participants.
a.
True
b.
False
Chapter 9—Insuring Your Health
5. HSAs are funded solely by employers, while HRAs are funded solely by employees.
a.
True
b.
False
6. A preferred provider organization has characteristics of both an IPA and an indemnity plan.
a.
True
b.
False
7. If your employer offers access to a group health insurance plan, you may still be better off going with an individual
policy.
a.
True
b.
False
8. Typically group health insurance plans provide substantially less comprehensive coverage than the average individually
underwritten policy.
a.
True
b.
False
Chapter 9—Insuring Your Health
9. If you lose your job, COBRA permits you to continue your group health insurance coverage permanently as long as you
pay the premium within 36 months of the termination of employment.
a.
True
b.
False
10. Blue Cross provides hospital coverage and Blue Shield provides prescription pharmacy coverage.
a.
True
b.
False
11. Medicare and Medicaid are hospital and physicians coverage, respectively.
a.
True
b.
False
Chapter 9—Insuring Your Health
12. Supplementary medical insurance (SMI) is a voluntary participatory program, commonly known as Medicare Part B.
a.
True
b.
False
13. Hospital insurance will pay daily room and board charges up to a specified number of days and reimbursement for
ancillary charges up to a specified dollar amount.
a.
True
b.
False
14. Hospital insurance policies will pay for all hospital expenditures most of the time.
a.
True
b.
False
15. When you are hospitalized for surgical care, surgical expense coverage will pay the hospital bill.
a.
True
b.
False
Chapter 9—Insuring Your Health
16. Some surgical expense insurance pays a specific amount for each type of surgery listed on a schedule of benefits.
a.
True
b.
False
17. Comprehensive major medical insurance provides the most complete coverage available.
a.
True
b.
False
18. Your bill for consultation with a specialist would ordinarily be paid by physician's expense coverage.
a.
True
b.
False
19. Major medical plans supplement the basic coverage of hospital, surgical, and physician's expense insurance.
a.
True
b.
False
Chapter 9—Insuring Your Health
20. Most major medical insurance plans feature a calendar-year, all-inclusive deductible.
a.
True
b.
False
21. In insurance terminology, "participation" and "co-insurance" mean the same thing.
a.
True
b.
False
22. Internal limits are constraints placed on insurance agents stipulating the level of risk for which they can write a policy.
a.
True
b.
False
23. Comprehensive major medical simply increases the policy limits of major medical insurance without changing the
Chapter 9—Insuring Your Health
coverage.
a.
True
b.
False
24. The ACA eliminates lifetime limits on total health care insurance payments by insurers.
a.
True
b.
False
25. A stop-loss provision places a cap on the amount of participation required.
a.
True
b.
False
26. Hospital expense coverage is adequate for long-term or catastrophic medical needs of most people.
a.
True
b.
False
Chapter 9—Insuring Your Health
27. Terms of payment and terms of coverage are two sets of provisions that should be carefully scrutinized when
evaluating an insurance program.
a.
True
b.
False
28. Your health insurance has an 80% co-insurance clause. Once the deductible is satisfied, your insurance company will
pay 80% of your covered losses up to the stated limits.
a.
True
b.
False
29. The major emphasis of dental insurance is to cover only extractions and x-rays.
a.
True
b.
False
30. Many health insurance policies offer only reduced benefits for treatment of mental disorders.
a.
True
b.
False
Chapter 9—Insuring Your Health
31. Health insurance policies automatically cover all family members.
a.
True
b.
False
32. Most surgical expense plans fully reimburse the cost of second opinions.
a.
True
b.
False
33. Only 10% of American adults have purchased long-term care insurance.
a.
True
b.
False
34. Long-term care insurance provides protection against the cost of extended hospital stays.
Chapter 9—Insuring Your Health
a.
True
b.
False
35. Long-term care insurance can cover both nursing home and home health care.
a.
True
b.
False
36. An elimination period is the number of days that must pass before disability policies pay proceeds.
a.
True
b.
False
37. An elimination period is a term that applies to disability insurance but not long-term care insurance.
a.
True
b.
False
Chapter 9—Insuring Your Health
38. Disability occurs only when someone is completely incapable of doing any type of work.
a.
True
b.
False
39. A presumption disability clause presumes total disability with certain types of injuries even if the injured can work in
some capacity.
a.
True
b.
False
40. Losing your job triggers a "qualifying life event" that allows you to obtain new insurance outside the normal
enrollment window.
a.
True
b.
False
41. The definition of "disability" is standardized in disability income policies.
a.
True
b.
False
Chapter 9—Insuring Your Health
42. With a COLA provision, the monthly long-term disability benefit is adjusted upward each year, often in line with the
CPI.
a.
True
b.
False
43. Disability income benefits under social security will be paid as long as you cannot perform the duties of the job you
were holding when the disability began.
a.
True
b.
False
44. Disability benefits are almost always taxable, so you typically need to purchase coverage that will replace gross pay.
a.
True
b.
False
Chapter 9—Insuring Your Health
45. Choosing insurance plans with deductibles and waiting periods is a form of risk assumption.
a.
True
b.
False
46. Living a healthy lifestyle is an example of loss prevention and control.
a.
True
b.
False
47. Under the ACA, family health care insurers must allow parents to retain their children on their health plans up to age
28.
a.
True
b.
False
48. With a managed care plan, an insurance company may not be involved.
a.
True
b.
False
Chapter 9—Insuring Your Health
49. A group HMO employs a group of doctors to provide healthcare services to members in a central facility.
a.
True
b.
False
50. A point-of-service (POS) plan is a hybrid HMO that allows members to go outside of network.
a.
True
b.
False
51. As an HMO member, you may have co-payments but no deductibles.
a.
True
b.
False
52. Medicare Advantage plans are administered by the government and supplementary to original Medicare.
a.
True
b.
False
Chapter 9—Insuring Your Health
53. Medicare deductibles and co-insurance amounts are revised annually to reflect changing medical costs.
a.
True
b.
False
54. Under the ACA, all Americans are required to have or buy health insurance or pay a penalty.
a.
True
b.
False
55. For most people, a managed care plan is a cheaper option compared to an indemnity plan.
a.
True
b.
False
56. Insurers are required to cover people with pre-existing medical conditions without limiting or setting unrealistically
high insurance rates.
a.
True
b.
False
Chapter 9—Insuring Your Health
57. Jackie pays $20 every time she visits her doctor. She is covered by a(n)
a.
HMO.
b.
IPA.
c.
PPO.
d.
indemnity plan.
e.
a, b, or c
58. An Individual Practice Association differs from an HMO in that
a.
you have no choice of the physician.
b.
they are located in a central facility.
c.
associated doctors operate from their own offices.
d.
they are less likely to be found in small communities.
e.
none of these.
59. The "O" in COBRA stands for which of the following words?
a.
Optical
b.
Opportunity
c.
Ordinary
d.
Omnibus
e.
Occupational
Chapter 9—Insuring Your Health
60. If your employment is terminated, COBRA provides for
a.
cancellation of all group insurance benefits.
b.
continuation of group insurance benefits until you are reemployed.
c.
permanent continuation of group health insurance.
d.
temporary continuation of group insurance benefits; you pay premiums.
e.
temporary continuation of group insurance benefits; employer pays premiums.
61. In recent years, which of the following groups paid the largest percentage of national health care expenditures?
a.
Households (consumers)
b.
Private businesses (employers)
c.
State and local governments
d.
Federal government
62. Medicare provides health care coverage to persons age ____ and those who are ____.
a.
55 and over; collecting disability under Social Security
b.
60 and over; collecting disability under Social Security
c.
65 and over; collecting disability under Social Security
d.
60 and over; low income
e.
65 and over; low income
Chapter 9—Insuring Your Health
63. Medicare is a government-sponsored health care plan composed of Part A and Part B. Part A covers
a.
hospital expenses.
b.
doctor's bills.
c.
custodial nursing home expenses.
d.
prescription drugs.
e.
all of the above.
64. Which of the following statements is true about the means (income) testing for Medicare?
a.
there are strictly enforced income limits that are based on federal standards but may vary slightly by state.
b.
limits apply to the amount of counted assets individuals can have, but they are routinely overlooked.
c.
means testing is intended to ensure that only the truly needy get access to Medicare.
d.
there is an asset test and an income test.
e.
Medicare is not income tested.
65. Medicare is a government-sponsored health care plan composed of Part A and Part B. Part B coverage includes
a.
hospital expenses.
b.
doctor's bills.
c.
custodial nursing home expenses.
d.
prescription drugs.
e.
all of the above.
Chapter 9—Insuring Your Health
66. Gabe is 58 years old and has been dependent on a cane for a couple of years. Gabe fears that he may need long-term
care services some day in the future. His net worth is $400,000 and he receives $50,000 per year in a pension. He
considers himself to be in excellent health and has never had a serious health scare like a heart attack, stroke, or cancer.
He eats lots of bran and exercises regularly. Which of the following policies would you recommend to Gabe?
a.
Gabe needs a disability income policy.
b.
Gabe should buy a long-term care policy with a long elimination period, lifetime benefits, and a COLA.
c.
Gabe should buy a long-term care policy with a five-year limit and short elimination period without a COLA.
d.
Gabe doesn't need disability insurance and probably can't qualify for long-term care insurance.
e.
Gabe can qualify for Medicaid if and when he needs long-term care services.
67. Supplementary Medical Insurance (SMI) provides health care protection beyond basic hospital coverage for
a.
all Medicare recipients.
b.
all social security recipients.
c.
Medicare recipients who pay for SMI on a compulsory basis.
d.
Medicaid recipients.
e.
Medicare recipients who pay for SMI on a voluntary basis.
68. Workers' compensation is a state program that provides benefits for
a.
unemployed workers.
b.
workers injured on the job.
c.
any injury suffered by a worker at any time.
Chapter 9—Insuring Your Health
d.
workers who become ill from work-related causes.
e.
only b and d.
69. Hospital indemnity policies would make payment for
a.
surgery.
b.
doctor's office visits.
c.
private duty nursing care.
d.
prescriptions when not in the hospital.
e.
per-day hospital charges.
70. Ben's health coverage charges a low ($15) deductible each time he visits the doctor or hospital. Other than the low per-
service deductible, there is very little cost sharing. However, Ben must go to the health care providers listed by the
provider of the health coverage. If he goes to a provider that is not on the list, there is very little coverage. Which of the
following types of entity most likely provides Ben's health coverage?
a.
HMO
b.
Blue Cross/Blue Shield association
c.
Commercial insurer (major medical)
d.
PPO
e.
Fee-for-service indemnity plan
71. Surgical expenses now generally are reimbursed on the basis of
