Personal Finance- Chapter 11- Planning for Health Care Expenses

Premiums The monthly or annual cost of a health care plan
Patient Protection and Affordable Care Act (ACA) The law passed by Congress in 2010 to provide affordable health insurance for all US citizens and reduce the growth in health care spending
Essential Health Benefits A list of ten categories of benefits that all health care plans sold on the health insurance exchanges must providee
Health insurance exchange (HIX) Stat-by-state mechanisms established by the ACA through which consumers can purchase a health care plan
Health care plan Generic name for any program that pays or provides reimbursement for health care expenditures
Group health plan Sold collectively to an entire group of people rather than to individuals, such as the group health care policies offered by employers
Health insurance Provides protection against direct medical expenses resulting from illness and injury based on the concept of payment after an expense occurs
Deductibles Clauses in health care plans that require the participant to pay an additional portion of health expenses annually before receiving reimbursement
Health maintenance organizations (HMOs) Health insurance plans that provide a broad range of health care services for a set monthly fee on a prepaid basis
Preferred provider organization (PPO) Group of health care providers (doctors, hospitals, and other health care providers) who contract with a health insurance company to provide services at a discount
COBRA rights The Consolidated Omnibus Budget Reconciliation Act of 1985 allows a former employee to remain a member of a group health plan for as long as 18 months if the employee worked for an employer with more than 20 workers
Medicare The federal government’s health care program for the elderly
Medicaid A government health care program for low-income people funded jointly by the federal and state governments
Health savings account (HSA) Tax-deductible savings account into which individuals or employers can deposit tax-sheltered funds to pay medical bills
Certificate of insurance Document or booklet that outlines group health insurance benefits
Co-payment A variation of a deductible that requires you to pay a specific dollar amount each time you use your benefits for a specific covered expense item
Coinsurance clause A clause in a health care plan that requires the participant to pay a proportion of any loss suffered
Long-term care insurance Provides reimbursement for costs associated with custodial care in a nursing facility Or at home
Activities of daily living (ADLs) Insurance companies use the inability to perform a certain number of such activities as a criterion for deciding when the insured becomes eligible for long-term care benefits
Custodial care Suitable for people who do not need skilled nursing care but who nevertheless require supervision (for example, help with eating or personal hygiene)
Benefit period The maximum period of time for which benefits will be paid under a disability income or other insurance
Waiting period (elimination period) The time period between the onset of a disability and the date that disability benefits begin
Disability income insurance Insurance that covers a portion of the income lost when you cannot work because of illness or injury
Social Security Disability Income Insurance Under this government program, eligible workers can received some income if their disabilities are total, meaning that they cannot work at any job
Any-occupation policy Provides full benefits only if the insured cannot perform any occupation
Residual clause Feature of own-occupation policies that allows for some reduced level of disability income benefits when a partial-rather than full-disability strikes
Social Security rider Provides an extra dollar amount of protection if a person fails to qualify for Social Security disability benefits (70 percent of all applicants are rejected)
Advance medical directives Treatment preferences and the designation of a surrogate decision maker in the even that a person should become unable to make decisions on her or his own behalf
Health care proxy A legal document in which individuals designate another person to make health care decisions on their behalf if they are rendered incapable of making their wishes known
Living will Allows you to document in advance your specific wishes concerning medical treatments in an emergency or during end-of-life health care
Will is concerned that his monthly disability income benefit would be eroded by inflation in case of a long-term disability. Which policy provision would guard against this problem? Cost-of-living adjustments
Your health insurance requires that you pay $50 each time you visit the doctor’s office and $15 for each prescription drug. This is an example of A copayment
One cannot rely on worker’s compensation to cover your health care needs because it Covers only job-related injuries and illnesses
Which of the following best describes a preexisting condition? A previously diagnosed medical condition
A legal document in which individuals designate another person to make health care decisions on their behalf if they are incapable of making their wishes known is called a health care proxy
___is a long-term care provision that is especially important for a relatively young person purchasing this type of insurance. Inflation protection
Which of the following government programs is jointly funded by federal and state governments? Medicaid
Traditional health insurance provides protection against direct medical expenses and, thus, does not cover lost income when you cannot work due to illness or injury
Eligibility for which of the following is based on household income and net worth? Medicaid
To make it possible for consumers to comply with the individual mandate to buy health insurance the Affordable Care Act established____ run by their states or the federal government health insurance exchanges
In what way(s) can health care costs potentially provide an income tax benefit? All of these(itemizing deductions for health care expenditures, flexible spending arrangement through an employer, and writing off a portion of premium by self-employed people)
Your waiting period on disability income insurance can be____ if you have some savings set aside as an emergency fund. lengthened
Medicare Part B covers all of the following except hospitilization
Lyle’s health care plan will pay 75 percent of all covered expenses over the first $500 per year. This policy contains coinsurance and deductible
The disability income insurance feature that provides a reduced level of benefit when you suffer a partial disability is called a residual clause
A longer waiting period on a disability income policy will reduce the disability income insurance premium
The period of time each year when you can make changes in your selection of health care plans available from your employer is called a(n) open-enrollment period
Which of the following can provide increased disability income from your disability income policy whenever you do not qualify for Social Security disability benefits? social security rider
Which of the following is NOT true of Medicare Part B? Does not cover outpatient care
The cost of a health maintenance organization is generally a(n) monthly fee, a deductible, and copayments
Long-term custodial care is covered by Medicaid
Persons who have a high-deductible health plan can make tax-sheltered deposits into an investment account called a___ from which they can pay medical expenses health savings account
A____ does not take effect until a specified event occurs, usually physical or mental incapacitation durable power of attorney
_____provide(s) preventative care as well as other types of care for a set monthly fee which is considered to be advance payment for the care received Health maintenance organization (HMO)
Traditional health insurance plans typically have___and____requirements that result in out-of-pocket costs for the insured deductibles; coinsurance
__provide(s) preventative care as well as other types of care for a set monthly fee which is considered to be advance payment for the care received. health maintenance organization (HMO)
Drawbacks of an HMO include limited choice of physicians
Most companies will NOT write disability income policies for more than___percent of one’s after-tax earnings. 60 to 80
Lance, a volunteer baseball coach, was hit by a hard line drive. As a result of the injury, Lance was taken to the emergency room for treatment and admitted to the hospital. Lance’s covered expenses totaled $4,000. How much of the $4,000 will Lance have to pay if these are his first medical expenses of the year and he has the following health insurance coverage?$500 deductible per year80/20 coinsurance$1,000 per year out-of-pocket coinsurance cap $1,200
Medicare Part A is a hospitalization program for persons over 65 and requires no premiums
Your waiting period on disability income insurance can be__ if you have some savings set aside as an emergency fund lengthened
You can help yourself afford a longer benefit period under a long-term care insurance plan by selecting a longer waiting period
If a long-term care policy is purchased prior to age___,the buyer faces a significant risk because inflation may render the daily benefit woefully inadequate when care is ultimately needed 60
Health care plans for Medicare eligible people that are purchased through a private company and provide both Medicare Parts A and B coverage are called. Medicare Advantage Plans
In a dual-income household where both employers provide a health care plan, it is important to choose to be covered under the plan that provides__and is___. more protection; less expensive
Reimbursement for costs associated with intermediate and custodial care in a nursing facility or at home is provided by long-term care insurance
A___ does not take effect until a specified event occurs, usually physical or mental incapacitation durable power of attorney
Under the Affordable Care Act, all health care plans must include ten specified essential health benefits
A person who wants to continue health insurance coverage through your COBRA rights must pay the full premiums plus a 2 percent administrative fee
An alternative name for traditional health insurance is a(n)? fee-for-service plan
A group of physicians and hospitals who have banded together to offer a health insurance contract in areas where there is no available HMO is called a preferred-provider network
To qualify as a high-deductible health care plan, the deductible must be at least $1000
Under the Affordable Care Act, your level of income used to calculate the maximum tax penalty if you have a health care plan is your modified adjusted gross income

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