Finance Chapter 15

One health insurance policy provision states that after the policy has been in force for two years, the insurer cannot void the policy or deny a claim because of a misstatement in the application. This provision is called the time limit on certain defenses provision
All of the following were major health care problems in the U.S. that led to the passage of the ACA except: waste and inefficiency in the medical system, uneven quality of medical care, universal access to medical care, rising health care expenditures universal access to medical care
Which of the following statements is (are) true with respect to disability income insurance? I) A standard definition of disability is used in all disability income insurance policies, II) The longer the elimination period in a disability income insurance policy, the higher the premium for the policy neither I or II
Curtis purchased a major medical policy. The policy has a calendar-year deductible of $500 and 80-20 coinsurance. Curtis was hospitalized with a covered illness on January 23. This hospitalization was his first claim under the major medical policy for the calendar year. His covered medical expenses were $20,500. How much of this amount will the insurer pay, and how much will Curtis be required to pay? Insurer will pay $16,000 and Curtis will pay $4,500
Which of the following statements is true regarding health savings accounts: to establish an HSA and favorable tax treatment, you must be covered by a high deductible health plan, if money remains in the HSA a the end of the year, it’s forfeited to government, HSA contributions are not tax deductible, no annual contribution limits to HSAs To establish an HSA and receive favorable tax treatment, you must be covered by a high-deductible health plan
Paula, a 42 year old surgeon, purchased disability income insurance. The policy defined disability as the inability to perform duties of your own occupation for the first two years. After two years, it’s defined as inability to perform duties of any occupation for which you can perform. Policy would replace 3/4 of lost income after a six-month elimination period, with benefits payable until age 65. Recently Paula was severely injured in an accident and her hands had to be amputated. How will Paula receive her disability income policy? Paula will receive disability benefits for at least two years
All of the following are characteristics of major medical insurance except: high lifetime limits, broad range of benefits, out-of-pocket limit, first-dollar coverage first-dollar coverage
Long-term care insurance policies include a provision that determines whether the insured is eligible to receive benefits. One example of this provision requires the insured to be unable to perform a certain number of activities of daily living in order to quality for benefits. What is this policy provision used in long-term care insurance policies called? benefit trigger provision
All of the following are reforms included in the affordable care act except: young adults can remain on parents health until age 26, insurers payout at least a specified percentage of premium, insurers are permitted to use annual and lifetime benefit limits, not allowing insurers to rescind health insurance policies if there was an unintentional error on the application insurers are permitted to use annual and lifetime benefit limits
Prior to the passage of the ACA, health insurers could deny coverage for medical impairments that were present prior to the effective date of the coverage. For adults, starting on January 1, 2014, insurers may no longer exclude these impairments. What are these impairments called? pre-existing conditions
Health insurance coinsurance Cost sharing after the deductible
Disability income insurance long term benefits vs short term benefits
important disability insurance provision waiting (elimination) period
Long term care insurance pays daily or monthly benefits, may be subject to aggregate cap
Which is true regarding individual medical expense insurance? I) The coverage provided is broad in scope, II) The coverage is usually provided without a deductible I only
Susan’s health insurance coverage cannot be canceled, is guaranteed renewable to age 65, and under no circumstances can her premium be increased. what type of renewable provision is found? noncancellable
All of the following are major problems with the health care system in the United States except: rising health-care expenditures, considerably waste and inefficiency, uneven quality of medical care, too many people covered under the present system. too many people covered under the present system
Ted’s health insurance lapsed because he didn’t pay the premium on time. Ted wants the coverage back in force. Which policy provision explains the requirements he must satisfy to place the coverage back in force? reinstatement period
Which statement is true regarding long-term care insurance: I) This coverage is not needed if you are covered under Medicare, II) Coverage is typically provided for skilled nursing care and custodial care II only
Heath insurance typically includes a two-year discovery period after which the insurer can’t void coverage or deny a claim because of concealment or misrepresentation by the applicant. This provision is called time limit on certain defenses provision
Beginning in 2014, most citizens and legal residents of the US are required to have health insurance or to pay a financial penalty. This provision of the affordable care act is called the individual mandate
All of the following are characteristics of long-term care insurance except: benefit triggers used to determine eligibility for benefits, inflation protection, elimination periods, unlimited benefits unlimited benefits
Which statement is true with regard to disability-income insurance? I) An increase in the elimination period will decrease the premium, II) Disability can be defined in a number of ways both I and II
Tina’s old health insurance coverage included a provision that excluded from coverage physical or mental conditions that were present prior to issuance of the policy and were not disclosed on the application. This provision, which is now prohibited by the ACA, is a preexisting condition clause
T/F Most individual medical expense plans cover the daily cost of a semi-private hospital room True
T/F The economic loss from long-term total disability can be greater than the economic loss that results from premature death True
T/F The guaranteed renewable renewal provision provides the greatest security to a health insurance purchaser. False
T/F Long-term care insurance is expense true
T/F Although the United States spends a significant percentage of GDP on health care, not everyone has health insurance coverage True
T/F Disability income insurance usually replaces all of a disabled person’s lost income False
T/F Under the ACA, tax credits are available to small employers who contribute to the cost of medical expense insurance for their employers True
T/F Individual medical expense policies do not have exclusions False
T/F Residual disability refers to whether a second disability is considered a continuation of a prior disability or considered a new disability False
T/F Contributions to health savings accounts are tax deductible True
T/F A single, uniform, definition of disability is used in all disability income policies False
T/F High-deductible health savings account plans limit annual out-of-pocket expenses True

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