Finance Chapter 9

Living a healthy lifestyle is an example of loss prevention and control.True False True
Under the adjusted (modified) community rating approach to health insurance premium pricing, all policyholders in an area pay the same premium without regard to their personal health, age, gender, or other factors.True False False
The community rating approach to health insurance premium pricing _____.A. prohibits insurance companies from varying rates based on health status or claims historyB. advocates offering Social Security Medicare program to all individuals irrespective of their ageC. favors the government’s contribution to the health savings account (HSA)D. considers only medical insurance coverage from a private insurance companyE. offers consumer directed health plans that go one step beyond a flexible-benefit plan A. prohibits insurance companies from varying rates based on health status or claims history
Long-term-care insurance provides protection against the cost of extended hospital staysTrueFalse False
Employers set up a salary reduction agreement with the employees if:A. employees are injured on the job or become ill through work-related causes.B. employees do not look for ways to avoid exposure to health care loss before it occurs.C. employees need additional insurance benefits.D. employees pay hospitalization charges for the pre-existing conditions.E. employees pay health care costs due to lapse of insurance coverage. C. employees need additional insurance benefits.
All group insurance plans extend health insurance benefits to retireesTrueFalse False
Health Maintenance Organizations (HMOs) provide health care to participants without requiring them to file insurance claims.TrueFalse True
Which of the following is true of the health care industry?A. In the fee-for-service plans, the health care provider is the same as the insurer.B. In managed care plans, employers contract with the health care service provider.D. In a traditional indemnity plan, the premium cost is low if it is a high-deductible plan.E. In traditional indemnity plans, the government waives the doctor’s fees or the hospital charges. D. In a traditional indemnity plan, the premium cost is low if it is a high-deductible plan.
Premiums for workers’ compensation insurance are paid by the employees.TrueFalse False
In the pure community rating approach to health insurance premium pricing, all policyholders in an area pay:A. premiums at varied rates based on their health status or claims history.B. premiums based on their family size, where they live, whether they use tobacco, and their age.C. the same premium without regard to their personal health, age, or gender.D. the premium as a contribution to a community pool of funds and utilize it on a need basis.E. a premium equal to the premium payable to the federal or state insurance exchange for a similar insurance policy. C. the same premium without regard to their personal health, age, or gender.
Medicare is a government-sponsored health care plan composed of Part A and Part B. Part A provides ________________ Inpatient hospital services
You would have a better chance of choosing your own doctor with a preferred provider organizations (PPO) plan than with a health maintenance organizations (HMO) plan.TrueFalse True
The average age of the American Population is ________ increasing
An exclusive provider organization (EPO) is _____.A. a prepaid hospital and medical expense plan that allows members to use nonaffiliated providersB. a managed care plan that reimburses members only when affiliated providers are usedC. a hybrid form of health maintenance organization (HMO) that reimburses members a specified percentage of the costD. a hybrid form of health maintenance organization (HMO) that allows members to go outside the HMO network for careE. a managed care plan in which subscribers receive services from physicians practicing from their own offices B. a managed care plan that reimburses members only when affiliated providers are used
When trying to determine your disability income needs, you should consider your available disability benefits from employers, income needs, and:A. flexible benefits.B. wage policy.C. non-monetary incentives.D. income tax bracket.E. Social Security benefits. E. Social Security benefits.
__________ is a health care plan that emphasizes cost control and preventive treatment. A managed care plan
Funds for Medicare benefits come from:A. monthly payments by users directly to the health care service organization.B. Social Security taxes paid by covered workers and their employers.C. the premiums paid by the employers for the employees.D. the health care service organization.E. the co-payment for health care services by the insured. B. Social Security taxes paid by covered workers and their employers.
_______ represents the initial amount that’s not covered by the policy and thus must be paid by the insured. The deductible
Long-term care is a term used to describe _____.A. the inflation protection riders in the insurance policyB. an extended period of hospital stay due to a serious illness or accidentC. the coverage for a serious illness or accident that prevents an insured person from working for an extended periodD. the delivery of medical care to persons with chronic medical conditions in a nursing homeE. compensation provided to the workers who are injured on the job or become ill through work-related causes. D. the delivery of medical care to persons with chronic medical conditions in a nursing home
Blue Cross provides hospital coverage and Blue Shield provides prescription pharmacy coverage.TrueFalse False
A _____ covers the cost of visits to a doctor’s office or for a doctor’s hospital visits, including consultation with a specialist. Regular medical expense insurance
An individual receiving health care:A. is allowed to receive either compensation from the employer or a one-time payment from only one insurance company for this care.B. is allowed to receive payments from his/her employer only twice in his/her lifetime.C. is allowed to receive a one-time payment only from his/her insurance company for this care.D. is allowed to receive multiple payments from only two insurance companies for this care.E. is allowed to receive multiple payments from more than one insurance company for this care. E. is allowed to receive multiple payments from more than one insurance company for this care.
Which of the following is a public assistance program that provides health insurance benefits only to those who are unable to pay for health care?A. MedicaidB. MedicareC. Point-of-service (POS) planD. Workers’ compensationE. Blue Cross/Blue Shield A. Medicaid
Michael’s estimated current monthly take-home pay is $4,500. His total existing monthly benefits is $2,950. Michael’s estimated monthly disability benefits is _____.A. $1,550B. $550C. $2,950D. $7,450E. $4,500 A. $1,550
Large employers are less likely to offer health insurance to their employees than small employersTrueFalse False
An insured individual’s right to continue a health insurance policy if he or she chooses is known as:A. benefits durationB. policy exclusion.C. renewability.D. co-payment.E. co-insurance. C. renewability.
Which of the following is true of the workers’ compensation insurance?A. Workers’ compensation insurance compensates workers who are injured on the job or become ill through work-related causes.B. Self-employed people pay lower premium to their employees for workers’ compensation insurance as compared to corporate employees.C. Employers are required to bear half of the entire cost of workers’ compensation insurance.D. Compensation received from the insurance coverage is based on historical usage; employees who file the least claims pay the lowest premiums on the insurance coverage.E. Workers’ compensation insurance includes only rehabilitation expenses. A. Workers’ compensation insurance compensates workers who are injured on the job or become ill through work-related causes.
Group health insurance premiums are _____.A. designed to cover only comprehensive medical expensesB. lower than an employer’s health insurance plan premiumsC. only meant to offer coverage for prescription drug, dental, and vision care servicesD. paid by the insurer to the insuredE. equal to the reimbursements of medical expenses on claims for medical treatment B. lower than an employer’s health insurance plan premiums
A supplementary medical insurance (SMI) provides health care protection beyond the basic hospital coverage for:A. Medicaid recipients who pay for SMI on a voluntary basis.B. all workers’ compensation insurance recipients.C. all Medicare recipients.D. all social security recipients.E. anyone age 65 or over who pays premiums on a voluntary basis. E. anyone age 65 or over who pays premiums on a voluntary basis.
Generally, group insurance plans are more reasonably priced than individual policies.TrueFalse True
A coordination of benefits provision in a health care policy _________________ by collecting benefits in multiple payments for health care. Prohibits collecting more than 100 percent of covered chargers
Medicare and Medicaid cover _____________________. Less than half of total cost of long term care
An elimination period is the number of days that must pass before disability policies pay the benefits.TrueFalse True
Which of the following statements is true of the Affordable Health Care Act (ACA)?A. The ACA provides major medical insurance with low deductibles to protect against catastrophic illnesses.B. The ACA requires employers to reimburse the cost of hospital stay of the insured.C. The ACA decides the insurance payments for dependents.D. The ACA limits the total number of surgeries for the insurers.E. The ACA eliminates lifetime limits on total health care insurance payments by insurers E. The ACA eliminates lifetime limits on total health care insurance payments by insurers
A good health insurance plan embodies more than financing medical expenses, lost income, replacement services; it incorporates Means of risk reduction such as risk avoidance
In a traditional indemnity (fee-for-service) plan,:A. the lower the deductible, the lower the premium.B. the insurer always pays directly to the health care provider.C. the insured receives comprehensive health care services from a designated group of doctors only.D. the health care provider and the insurer are separate.E. the health care provider contracts with the insured’s employee union to provide health insurance benefits. D. the health care provider and the insurer are separate.
If you are laid off, your group health insurance _________ Must be continued if you pay premiums.
Health insurance consisting of contracts written between a group and the health care provider Group Health Insurance
Health insurance plan in which the health care provider is separete from the insurer, who pays the provider or reimburses you for a specified percentage of expenses after a deductible amount has been met Indemnity Plan
a health care plan in which subscribers/ users contract with the provider organization, which uses a designated group of providers meeting specific standards to furnish health care services for a monthly fee Managed Care Plan
an organization of hospitals, physicians, and other healthcare providers who have joined to provide comprehensive health care services to its members, who pay a monthly fee Health Maintenance Organization (HMO)
a HMO that provides health care services from a central facility; most prevelant in larger cities Group HMO
A form of HMO in which subscribers recieve services from physicans practicing from their own offices and from community hospitals affiliated with the IPA Individual Practice Association
A health provider that combines the characteristics of the IPA form of HMO with an indemnity plan to provide comprehensive health care services to its subscribers within a network of physicians and hospitals Preferred Provider Organization (PPO)
a managed care plan that is similar to a PPO but reimburses members only when affiliated providers are used Exclusive Provider Organization (EPO)
A hybrid form of HMO that allows members to go outside HMO network for care and reimburses them at a specified percentarge of the cost Point-of-Service Plan (POS)
a prepaid hospital and medical expense plans under which health care services are provided to plan participants by member hospitals and physicians Blue Cross/ Blue Shield Plans
a health insurance plan administrated by the federal government to help persons age 65 and over and others receving monthly social security disabiity benesits to meet their health care costs. Medicare
a voulentary program under Medicare that provides payments for services not covered under basic hospital insurance Supplementary Medical Insurance
commonly called Plan C, these plans provide Medicare benefits to eligble people, but they differ in that they are administered by probate providers rather than by the government. Common supplemental benefits include vision, heading, dental, general checkups, and health and wellness programs Medicare Advantage Plan
A voluntary program under Medicare insurance that covered both brand name and generic prescription drugs at participating pharmacies. Participants pay a monthly fee and a yearly deductible and must also pay part of the cost of prescriptions, including copayment or co-insurance Prescription Drug Coverage
a state-run, public assistance program that provides health insurance benefits only to those who are unable to pay for healthcare Medicaid
Health insurance required by state and federal governments and paid nearly in full by employers in most states; it compensates workers for job-related injury or illness Works Compensation Insurance
an account into which employers place contributions that employees can use to pay for medical expenses. Usually combined with a high-deductible health insurance polocy Health Reimbursement Account (HRA)
A tax-free savings account–funded by employees, employers or both–to spend on routine medical costs. Usually combined with a high deductible polocy to pay for catatrophic care. Health Savings Account (HSA)
policyholders in a community area pay the same premium without regard to their personal health, age, gender, or other factors Community Rating Approach to Health Insurance Premium Pricings
an insurance plan designed to supplement the basic coverage of hospitalization, surgical and physicians expenses; used to finance more catastrophic medical costs Major Medical Plan
a health insurance plan that combines into a single policy the coverage for basic hospitalization, surgical and physician expenses along with major medical protection Comprehensive Major Medical Insurance
the initial amount not covered by an insurance policy and thus the insured’s responsibility; usually determined on a calendar-year basis or on a per-illness or per-accident basis Deductible
a provision in many health insurance policies stipulating that the insurer will pay some portion–80 or 90 percent–of the amount of covered loss in excess of the deductible participation clause
a feature commonly found in health insurance policies that limit that amounts that will be paid for certain specified expenses, even if the claim does not exceed overall policy limits Internal Limits
provisions often included in health insurance policies to prevent the insured from collection more than 100 percent of covered charges; it requires that benefit payments be coordinated if the insured is eligible for benefits under more than one policy. Coordination of Benefits Provision
A clause included in most individual health insurance policies permitting the permanent or temporary exclusion of coverage for any physical or mental problems the insured had at the time the policy was purchased. Pre-existing condition clause
a federal law that allows an employee who leaves the insured group to continue coverage for up to 18 months by paying premiums to his or her former employer on time; the employee retains all benefits previously available, except for disability coverage. Consolidation Omnibus Budget Reconcilliation Act (COBRA)
the delivery of medical and personal care, other than hospital care, to persons with chronic medical conditions resulting from either illness or frailty Long-Term Care
The period, after an insured meets the policy’s eligibility requirements, during which he or she must pay expenses out of pocket; when the waiting period expires the insured begins to receive benefits Waiting period (Elimination Period)
Policy provision ensuring continued insurance coverage for the insured’s lifetime as long as the premiums continue to be paid. Guaranteed Renewability
Contractual clause allowing the insured to continue insurance only at the insurers’ option Optional Renewability
Insurance that provides families with weekly or monthly payments to replace income when the insured is unable to work because of covered illness, injury or disease. Disability income Insurance

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