Chapter 9—Insuring Your Health
1. About 13% of Americans are not covered by health insurance.
a.
True
b.
False
True
Easy
2. Advances in medical technology, prescriptions drugs, and treatments have substantially reduced health care costs in
recent decades.
a.
True
b.
False
False
Easy
3. You have a better chance of choosing your own doctor with a PPO than with an HMO.
a.
True
b.
False
True
Moderate
4. Blue Cross/Blue Shield provides prepaid health care to participants.
a.
True
b.
False
True
Moderate
Chapter 9—Insuring Your Health
5. HSAs are funded solely by employers, while HRAs are funded solely by employees.
a.
True
b.
False
False
Easy
6. A preferred provider organization has characteristics of both an IPA and an indemnity plan.
a.
True
b.
False
True
Challenging
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
True
Easy
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
False
Moderate
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
False
Moderate
10. Blue Cross provides hospital coverage and Blue Shield provides prescription pharmacy coverage.
a.
True
b.
False
False
Challenging
11. Medicare and Medicaid are hospital and physicians coverage, respectively.
a.
True
b.
False
False
Moderate
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
True
Challenging
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
True
Challenging
14. Hospital insurance policies will pay for all hospital expenditures most of the time.
a.
True
b.
False
False
Moderate
15. When you are hospitalized for surgical care, surgical expense coverage will pay the hospital bill.
a.
True
b.
False
False
Challenging
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
True
Moderate
17. Comprehensive major medical insurance provides the most complete coverage available.
a.
True
b.
False
True
Moderate
18. Your bill for consultation with a specialist would ordinarily be paid by physician’s expense coverage.
a.
True
b.
False
True
Moderate
19. Major medical plans supplement the basic coverage of hospital, surgical, and physician’s expense insurance.
a.
True
b.
False
True
Chapter 9—Insuring Your Health
20. Most major medical insurance plans feature a calendar-year, all-inclusive deductible.
a.
True
b.
False
True
Moderate
21. In insurance terminology, “participation” and “co-insurance” mean the same thing.
a.
True
b.
False
True
Easy
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
False
Moderate
23. Comprehensive major medical simply increases the policy limits of major medical insurance without changing the
Moderate
Chapter 9—Insuring Your Health
coverage.
a.
True
b.
False
False
Challenging
24. The ACA eliminates lifetime limits on total health care insurance payments by insurers.
a.
True
b.
False
True
Moderate
25. A stop-loss provision places a cap on the amount of participation required.
a.
True
b.
False
True
Moderate
26. Hospital expense coverage is adequate for long-term or catastrophic medical needs of most people.
a.
True
b.
False
False
Easy
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
True
Easy
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
True
Easy
29. The major emphasis of dental insurance is to cover only extractions and x-rays.
a.
True
b.
False
False
Challenging
30. Many health insurance policies offer only reduced benefits for treatment of mental disorders.
a.
True
b.
False
True
Chapter 9—Insuring Your Health
31. Health insurance policies automatically cover all family members.
a.
True
b.
False
False
Moderate
32. Most surgical expense plans fully reimburse the cost of second opinions.
a.
True
b.
False
True
Moderate
33. Only 10% of American adults have purchased long-term care insurance.
a.
True
b.
False
False
Moderate
34. Long-term care insurance provides protection against the cost of extended hospital stays.
Moderate
Chapter 9—Insuring Your Health
a.
True
b.
False
False
Moderate
35. Long-term care insurance can cover both nursing home and home health care.
a.
True
b.
False
True
Moderate
36. An elimination period is the number of days that must pass before disability policies pay proceeds.
a.
True
b.
False
True
Moderate
37. An elimination period is a term that applies to disability insurance but not long-term care insurance.
a.
True
b.
False
False
Moderate
Chapter 9—Insuring Your Health
38. Disability occurs only when someone is completely incapable of doing any type of work.
a.
True
b.
False
False
Moderate
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
True
Easy
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
True
Moderate
41. The definition of “disability” is standardized in disability income policies.
a.
True
b.
False
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
True
Moderate
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
False
Challenging
44. Disability benefits are almost always taxable, so you typically need to purchase coverage that will replace gross pay.
a.
True
b.
False
False
Moderate
Moderate
Chapter 9—Insuring Your Health
45. Choosing insurance plans with deductibles and waiting periods is a form of risk assumption.
a.
True
b.
False
True
Easy
46. Living a healthy lifestyle is an example of loss prevention and control.
a.
True
b.
False
True
Easy
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
False
Easy
48. With a managed care plan, an insurance company may not be involved.
a.
True
b.
False
True
Easy
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
True
Easy
50. A point-of-service (POS) plan is a hybrid HMO that allows members to go outside of network.
a.
True
b.
False
True
Challenging
51. As an HMO member, you may have co-payments but no deductibles.
a.
True
b.
False
True
Challenging
52. Medicare Advantage plans are administered by the government and supplementary to original Medicare.
a.
True
b.
False
False
Challenging
Chapter 9—Insuring Your Health
53. Medicare deductibles and co-insurance amounts are revised annually to reflect changing medical costs.
a.
True
b.
False
True
Moderate
54. Under the ACA, all Americans are required to have or buy health insurance or pay a penalty.
a.
True
b.
False
True
Easy
55. For most people, a managed care plan is a cheaper option compared to an indemnity plan.
a.
True
b.
False
True
Easy
56. Insurers are required to cover people with pre-existing medical conditions without limiting or setting unrealistically
high insurance rates.
a.
True
b.
False
True
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
e
Challenging
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Bloom’s: Remembering
58. An Individual Practice Association differs from an HMO in that
a.
b.
c.
d.
e.
c
Challenging
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Bloom’s: Analyzing
59. The “O” in COBRA stands for which of the following words?
a.
Optical
b.
Opportunity
c.
Ordinary
d.
Omnibus
e.
Occupational
Easy
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United States – KS – DISC: Risk and Return
Bloom’s: Remembering
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.
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Bloom’s: Remembering
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
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Bloom’s: Remembering
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
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Bloom’s: Remembering
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.
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Bloom’s: Remembering
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.
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Bloom’s: Remembering
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.
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Bloom’s: Remembering
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.
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Bloom’s: Analyzing
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.
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Bloom’s: Remembering
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.
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Chapter 9—Insuring Your Health
d.
workers who become ill from work-related causes.
e.
only b and d.
e
Moderate
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Bloom’s: Remembering
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.
e
Challenging
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Bloom’s: Remembering
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
a
Challenging
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Bloom’s: Analyzing
71. Surgical expenses now generally are reimbursed on the basis of