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27 Cards in this Set
- Front
- Back
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Tom is covered under Medicare Part A. He spends 1 week in the hospital for some minor surgery and returns home on July 10. It was his first hospital stay in years. Which of the following statements is CORRECT regarding his Medicare coverage? * A) After Tom pays the deductible, Medicare will pay 80% of all covered charges.* B) Medicare will pay benefits, but Tom must make a daily copayment. * C) After Tom pays the deductible, Medicare will pay 100% of all covered charges. * D) Medicare will not cover Tom's hospital expenses because he was not hospitalized for 10 consecutive days. |
c |
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Many disability buy-out plans are characterized by all of the following EXCEPT: * A) relatively short elimination periods.* B) option to have benefits paid in periodic installments. * C) requirement that the nondisabled owners purchase the disabled owner's share of the business. * D) option to have benefits paid in a lump sum. |
a The elimination period for business disability buy-out plans is generally longer than that for individual plans and may be as long as 2 years. Many plans include the option to have benefits paid either periodically or in a lump sum at the end of a specified period. |
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If an insurer's group contract replaces that of another insurer, which of the following statements about the prior carrier is CORRECT? * A) It remains totally liable for a transition period of 6 weeks.* B) It remains totally liable for 48 hours. * C) It remains liable only to the extent of its accrued liabilities and extensions of benefits. * D) It has no liability once the transition is made. |
c When replacement of coverage occurs, the prior carrier remains liable only to the extent of its accrued liabilities and extensions of benefits. The position of the prior carrier shall be the same whether the group policyholder secures replacement from a new carrier, self-insures, or forgoes the provision of coverage. |
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Long-term care policies can: * A) be canceled due to the insured's age.* B) be canceled due to deterioration of the insured's mental health. * C) limit coverage for alcoholism. * D) limit coverage for Alzheimer's disease |
c No long-term care insurance policy can be canceled because of the deterioration of the insured's mental health or age. Generally, long-term care policies cannot limit or exclude coverage by type of illness, treatment, medical condition, or accident. However, coverage can be limited for mental or nervous disorders (except Alzheimer's disease) and for alcoholism and drug addiction. |
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Which of the following does NOT have to be included in all Medicare supplement policies? * A) Coverage under Medicare Part A for the first three pints of blood or equivalent.* B) Coverage under Part C for medical care in foreign countries. * C) Medicare Part A eligible hospital expenses not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period. * D) Medicare Part A eligible expenses for daily hospital charges covered by Medicare for each Medicare lifetime inpatient reserve day used. |
b Under Plan A, the core Medicare plan must include coverage for the first three pints of blood, eligible hospital expenses not covered by Medicare for days 61 through 90, and eligible expenses for daily hospital charges covered by Medicare for each Medicare lifetime inpatient reserve day used. A Medicare supplement policy does not have to provide coverage under Part C for medical care in foreign countries. |
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Disability income benefits for partial disability typically are payable to eligible insureds for a MAXIMUM of: * A) two years.* B) three to six months. * C) one year. * D) one to three months. |
b Disability income benefits for partial disability (an inability to perform one or more important job duties) typically are payable to eligible insureds for a maximum of three to six months. |
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Under the standard cancellation provision, an insurance company has the right to cancel a policy at any time with how many days' written notice to the insured? * A) 30 days.* B) 60 days. * C) 5 days. * D) 15 days. |
c Under the standard cancellation provision, the insurance company has the right to cancel the policy at any time with five days' written notice to the insured. This provision is nevertheless prohibited in many states. |
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Hubert, the insured, changes to a more hazardous job than the one he had when he applied for his disability income policy. According to the policy's change of occupation provision, what will happen when the insurer learns of his job change? * A) A specified percentage of benefits penalty will be charged against any future benefit payments.* B) Policy benefits will be reduced to an amount the premiums would have purchased if they were based on the more hazardous occupation. * C) There is nothing the insurer can do as long as Hubert pays the premiums for the policy. * D) The insurer will cancel the policy unless Hubert pays an additional premium to cover the higher risk. |
b According to the policy's change of occupation provision, policy benefits will be reduced to an amount the premiums would have purchased if they were based on the more hazardous occupation. Had Hubert changed to a less hazardous occupation (i.e., one that calls for a lower premium), the insurer would pay the full benefit for the loss and refund the excess premium to him. |
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If a worker is killed in an industrial accident, workers' compensation insurance will cover all of the following EXCEPT: * A) Payment of burial expenses.* B) Compensation for dependents of the deceased worker. * C) Compensation to the employer for loss of the employee's services. * D) Compensation for the surviving spouse. |
c Workers' compensation is designed to help injured or deceased workers and their families. It is not intended to compensate employers. If a worker is killed in an industrial accident, workers' compensation insurance provides compensation to the surviving spouse and any persons who were dependent on the worker at the time of death. It also covers burial expenses. |
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A long-term care insurance policy may limit or exclude coverage for all of the following reasons EXCEPT: * A) treatment in a government facility when coverage is available through Medicare.* B) drug addiction. * C) Alzheimer's disease. * D) alcoholism. |
c A long-term insurance policy may limit or exclude coverage for alcoholism, drug addiction and treatment provided in a government facility when coverage is available through other sources such as Medicare. A policy also may limit coverage for mental or nervous disorders, except for Alzheimer's disease. |
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For how many days of care in a skilled nursing facility will Medicare pay benefits? * A) 100 days.* B) 20 days. * C) 60 days. * D) 75 days. |
a Medicare Part A covers the cost of care in a skilled nursing facility as long as the patient was first hospitalized for three consecutive days. Treatment in a skilled nursing facility is covered in full for the first 20 days. From the 21st to the 100th day, the patient must pay the daily copayment. There are no Medicare benefits provided for treatment in a skilled nursing facility beyond 100 days. |
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All of the following provisions are optional in individual health insurance policies EXCEPT: * A) a change of occupation provision.* B) a misstatement of age provision. * C) an incontestability provision. * D) an intoxicants and controlled substances provision. |
c An incontestability provision is a mandatory, rather than optional, provision in individual health insurance policies. An incontestability provision states that two years after the date of issue, no misstatements on the application (unless fraudulent) may be used to void the policy or deny a claim. |
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The "core policy" (Plan A) developed by the NAIC as a standard Medicare supplement policy includes all of the following EXCEPT: * A) foreign travel emergency care.* B) the 20% Part B coinsurance amounts for Medicare-approved services. * C) coverage for Part A copayment amounts. * D) the first three pints of blood each year. |
a This plan includes coverage for Part A copayment amounts; 365 additional (lifetime) days of Medicare-eligible expenses once the Medicare lifetime reserve days are exhausted; the 20% Part B copayment amounts (for Medicare-approved services); and the first three pints of blood each year. At a minimum, all Medicare supplement policies must contain these core benefits. |
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Individual accident and health insurance policies must contain all of the following provisions EXCEPT: * A) change of beneficiary provision.* B) change of occupation provision. * C) time limit on certain defenses provision. * D) proof of loss provision. |
b Individual accident and health insurance policies must contain change of beneficiary, proof of loss, and time limit on certain defenses provisions. A change of occupation provision is optional. |
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Individuals claiming a need for Medicaid must prove that they cannot pay for their own nursing home care. In addition, the potential recipient must: * A) be receiving Social Security.* B) be at least 70 years old. * C) need the type of care that is provided only in a nursing home. * D) be a long-term care insurance policyowner. |
c To qualify for Medicaid nursing home benefits, an individual must be at least 65 years old, blind, or disabled; be a U.S. citizen or permanent resident alien; need the type of care that is provided only in a nursing home; and meet certain asset and income tests. |
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Which of the following dental services usually require the insured to pay a deductible or co-payment? * A) Oral examinations.* B) Complete x-ray surveys. * C) Topical fluoride treatments. * D) Preparation of retainers and braces. |
d Preparation of retainers and braces is considered major dental care. Orthodontic services include treatment with braces, retainers, or diagnostic materials. |
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What did the federal HMO law do to encourage the formation of HMOs? * A) Established HMO quotas for each state.* B) Set up subsidies for physicians and other medical specialists. * C) Provided federal assistance for federally qualified HMOs. * D) Provided for training personnel. |
c The Health Maintenance Organization Act of 1973 encouraged the formation of HMOs by providing federal assistance for planning and development of federally qualified HMOs. Subsequent amendments to the act provided grants for feasibility studies, planning activities, and initial development of activities. In addition, loans or loan guarantees were provided to cover operating losses during the first 5 years of operation and for the acquisition and construction of ambulatory health care facilities. |
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Which of the following provisions is optional in an individual health insurance policy? * A) Grace period.* B) Unpaid premium provision. * C) Entire contract provision. * D) Change of beneficiary provision. |
b All individual health insurance policies must contain an entire contract provision stating that the policy, including the endorsements and attached papers, constitutes the entire insurance contract. Individual policies must also contain a grace period of at least 7 days for weekly premium policies, 10 days for monthly premium policies, or 31 days for all other policies for payment of each premium after the first. A change of beneficiary provision, which states that the insured has the right to change the beneficiary unless an irrevocable beneficiary designation has been made, is also mandatory. However, an unpaid premiums provision is optional and states that when a claim is paid, any premium due may be deducted from the payment. |
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According to the disability insurance time limit on certain defenses provision, how long after the date of a policy's issue can innocent misstatements on an application be used to void a claim? * A) Two years.* B) Five years. * C) For the life of the policy. * D) One year. |
a When a policy has been in effect for two years, the insurer may not void the policy or deny a claim on the basis of a misstatement on the application, in the absence of fraud. |
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Which of the following statements regarding coverage of a spouse under an employer-sponsored group health insurance plan is CORRECT? * A) The spouse becomes eligible after the employee has been covered for 31 days.* B) The spouse becomes eligible at the first open enrollment period after coverage of the employee begins. * C) The spouse becomes eligible during open enrollment periods if coverage was initially declined. * D) The spouse becomes eligible at the time the employee is covered, with proof of insurability. |
C If the spouse declines coverage after 31 days of becoming eligible, future coverage is available only during open enrollment periods or when proof of insurability is provided. Otherwise, dependents become eligible at the same time coverage is provided to the employee. Proof of insurability at the time of initial eligibility may or may not be required under the plan. |
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All of the following are required provisions for accident and health policies EXCEPT: * A) misstatement of age.* B) change of beneficiary. * C) proof of loss. * D) entire contract and changes. |
A Misstatement of age is an optional accident and health policy provision. |
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To provide a short rest period for a family caregiver, long-term care policies can cover: * A) respite care.* B) custodial care. * C) home health care. * D) temporary care. |
A Long-term care policies may offer respite care, which is designed to provide a short rest period for a family caregiver. Care is provided under two options: either the insured is moved to a full-time care facility or a substitute care provider moves into the insured's home for a temporary period, thus giving the family member a rest from caregiving activities. |
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Which renewability provision allows an insurer to not renew a health insurance policy on a given date as specified in the policy? * A) Guaranteed renewable.* B) Conditionally renewable. * C) Cancellable. * D) Optionally renewable. |
D The renewability provision in an optionally renewable policy gives the insurer the option to terminate the policy on the date specified in the contract. The date specified is typically the policy anniversary date or the premium due date. |
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Which of the following statements regarding an employee's conversion privilege under a group health insurance policy is CORRECT? * A) He can convert his coverage within six months of leaving the group.* B) He can convert his coverage while still an employee. * C) He can convert his coverage to a policy through the same insurer that insures the group. * D) He can be denied coverage if he is uninsurable at the time of conversion. |
C An employee is guaranteed the right to convert coverage to an individual policy through the same insurer that underwrites the group. He cannot be denied the right to conversion even if he has become uninsurable. He can no longer be part of the group to exercise this option. If he leaves the group, he must exercise his right within a limited period, usually one month. During that time, he remains insured under the group plan. |
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To be considered qualified, a long-term care insurance policy must conform to requirements concerning all of the following EXCEPT: * A) policy conversion.* B) policy replacement. * C) premium charges. * D) marketing standards. |
C To be considered a qualified contract, a long-term care insurance policy must follow NAIC's long-term care insurance model regulations, which address the following: policy replacement, conversion, marketing standards, prohibitions on limits and exclusions, and policy renewability, among other things. |
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With an optionally renewable policy, the insurance company reserves the right to: * A) cancel the policy anytime with 5 days' notice.* B) terminate coverage at any policy anniversary date or premium due date. * C) increase the premium on a policy if benefits paid to an insured exceed a stated amount. * D) modify the coverage if claims filed by the insured exceed an amount specified in the policy. |
B With an optionally renewable policy, the company reserves the right to terminate coverage at any policy anniversary date or premium due date but may not exercise this right between such dates. |
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Which of the following provisions must be included in an individual accident and health insurance policy? * A) 2-year time limit on certain defenses.* B) Coverage of newborns. * C) Misstatement of age. * D) Change of occupation. |
A |
