Health Final 1

Front 1

From the insured's perspective, which of the following types of disability coverage would be the LEAST restrictive as to qualifying for benefit payments?

* A) Workers' compensation.
* B) Any occupation.
* C) Social Security.
* D) Own occupation.

Back 1

d

From the insured's perspective, qualifying for disability benefits would be the least restrictive under an "own occupation" policy, which requires that the insured be unable to work at his or her own occupation, because of a disabling sickness or injury, from any cause. Such a policy is more expensive and difficult to qualify for. An "any occupation" definition requires that the insured be unable to work at any job for which he or she is qualified; Social Security requires that the insured be unable to perform at any gainful employment; and workers' compensation provides benefits only if the individual is disabled because of employment-related injury or illness.

Front 2

An individual may take legal action to recover on an accident and health insurance policy no sooner than how many days after written proof of loss is provided?

* A) 50 days.
* B) 20 days.
* C) 30 days.
* D) 60 days.

Back 2

d

Accident and health insurance policies must contain a legal action provision stating that legal actions to recover on a policy can begin no sooner than 60 days or later than 3 years after written proof of loss is furnished.

Front 3

The probationary period in disability income policies usually lasts:

* A) no more than one week.
* B) six months to one year.
* C) two to five months.
* D) two weeks to one month.

Back 3

d

Most disability income policy probationary periods range from 15 to 30 days after the effective date.

Front 4

All of the following statements about medical savings accounts (MSAs) are correct EXCEPT:

* A) they are tax-free accounts set up with financial institutions.
* B) they consist of a high-deductible health plan and a savings account.
* C) they were created to help employees of large employers.
* D) funds can be withdrawn tax-free to pay for qualified medical expenses.

Back 4

c

Medical savings accounts (MSAs) were created to help employees of small employers and self-employed individuals pay for their medical care expenses. The other answer choices are all correct statements.

Front 5

Joni is covered under a dental insurance plan that requires her to annually pay the first $200 of dental expenses (other than routine semi-annual examinations and cleanings, which are covered in full), at which point the plan reimburses her for 80% of the cost of routine care. Based only on this information, Joni is most likely covered under a(n):

* A) capitation plan.
* B) comprehensive plan.
* C) exclusive provider organization.
* D) dental health maintenance organization.

Back 5

b

Most commonly provided by commercial insurance companies, comprehensive plans operate much like major medical health insurance plans. Though routine examinations and cleanings may be covered in full, other routine care is covered only after the insured satisfies an annual deductible. Insureds are also required to pay for a percentage of covered care through the plan's coinsurance provision.

Front 6

Individual health insurance policies specify that the insured must furnish proof of loss to the insurer how long after the date of the loss?

* A) 10 days.
* B) Immediately.
* C) 90 days.
* D) Proof of loss is not required for most health insurance policies.

Back 6

c

Individual health insurance policies must contain a proof of loss provision stating that the insured must furnish proof of loss to the insurer within 90 days of the date of loss.

Front 7

Health coverage issued to members of an association or professional society is known as:

* A) franchise health plans.
* B) employers group health plans.
* C) blanket health plans.
* D) credit health plans.

Back 7

a

Franchise health plans provide health insurance coverage to members of an association or professional society. Individual policies are issued to individual members; the association or society simply serves as the sponsor for the plan. Premium rates are usually discounted for franchise plans.

Front 8

For situations where no initial premium was paid when the application was taken, when delivering that policy the agent is generally required to do all of the following EXCEPT:

* A) collect any premium due.
* B) obtain a Statement of Good Health from the insured.
* C) explain the policy, its provisions, and any riders, exclusions, or ratings involved.
* D) present the insured with a conditional receipt.

Back 8

d

Since the insured has already been underwritten and a policy issued, a conditional receipt is no longer applicable to these type situations. Keep in mind, however, that whether the policy will go into effect or not is dependent upon the insured's health status at the time of delivery and full payment of any premiums due. If the insured has experienced any negative health changes that could effect their insurability since the time of the application, the agent cannot deliver the policy and coverage does not go into effect.

Front 9

Which of the following accurately describes the service approach used by Blue Cross and Blue Shield?

* A) Blue Cross and Blue Shield are for-profit organizations run by insurance companies.
* B) Both Blue Cross and Blue Shield reimburse their subscribers for covered medical and hospital expenses.
* C) Blue Shield plans provide prepayment coverage for hospital expenses; Blue Cross plans provide prepayment coverage for medical and surgical services.
* D) Both Blue Cross and Blue Shield plans do not reimburse for covered expenses, but pay health care providers directly.

Back 9

d

Blue Cross and Blue Shield are not-for-profit health care service organizations. Blue Shield plans provide prepayment coverage for medical and surgical expenses, while Blue Cross plans provide prepayment coverage for hospital expenses. Both Blue Cross and Blue Shield plans operate under the service approach which does not involve reimbursement for covered expenses but rather a guarantee that covered services will be provided without charge to their subscribers.

Front 10

Fran, age 39, comes from a family with a history of Parkinson's disease. To protect herself in the future, she is considering purchasing long-term care insurance. Which one of the following statements is CORRECT?

* A) Long-term care policies will not cover organic cognitive disorders such as Parkinson's disease.
* B) If Fran selects a policy with a long probationary period, her premiums will be higher.
* C) Fran will not be insurable given her family's history of Parkinson's disease.
* D) Fran will need to make sure she meets the insurer's minimum issue age requirement for LTC insurance.

Back 10

d

Many long-term care insurance policies set a minimum purchase age. While many of the minimum issue ages range from between 50 and 60 years of age, some insurers have younger minimum issue ages. In applying for long-term care insurance, Fran will need to make sure she meets the insurer's minimum issue age requirement. While policy exclusions can vary by insurer, diseases such as Alzheimer's and Parkinson's are covered by a number of insurers. Fran choosing a long probationary period would result in a lower premium, not a higher one.

Front 11

All of the following statements characterize long-term care insurance EXCEPT:

* A) it must provide for an automatic adjustment to correspond to changes in Medicare's long-term care coverage.
* B) it provides coverage for at least 12 consecutive months.
* C) it provides coverage for care provided in a setting other than an acute care unit of a hospital.
* D) it may be issued as a group policy or as individual policies.

Back 11

A

Long-term care insurance provides coverage for care provided in a setting other than a hospital acute care unit for at least 12 consecutive months. It may be issued as a group policy or as individual policies.

Front 12

Concerning the consideration clause for a health insurance policy, all of the following statements are correct EXCEPT:

* A) the amount and frequency of premium payment are stated in the consideration clause.
* B) the consideration clause may specify the insured's right to renew the policy.
* C) a consideration clause may be included in a rider, if requested by the insured.
* D) two principal elements of the consideration clause are the premium payment and the application

Back 12

C

The consideration clause is integral to a health insurance policy. As such, it would never be included in a rider.

Front 13

Basic hospital expense coverage typically provides coverage for at least how many days for one period of hospital confinement for each covered person?

* A) 60 days.
* B) 20 days.
* C) 10 days.
* D) 31 days.
*

Back 13

D

Basic hospital expense coverage typically provides coverage for at least 31 days of continuous in-hospital care for one period of hospital confinement for each covered person.

Front 14

A health insurance plan would require the naming of a beneficiary in order to:

* A) identify supplemental assets upon the termination of benefits.
* B) reallocate unused funds in a medical savings account (MSA) or health savings account (HSA).
* C) indicate who is to receive benefits if the insured becomes disabled.
* D) identify the recipient of the Social Security death benefit.

Back 14

B

With an MSA or HSA, remaining assets in the savings account can be transferred to a spouse or other designated beneficiary.

Front 15

All of the following statements regarding preexisting conditions are correct EXCEPT:

* A) disability income policies commonly include a probationary period to help control the risk of preexisting conditions.
* B) medical expense policies frequently exclude benefits for losses due to such conditions.
* C) specifying exclusions for preexisting conditions helps an insurer to maintain reasonable premium rates.
* D) by most policy definitions, a preexisting condition is one that was contracted by the insured within 1 year before a policy was issued.

Back 15

D

A preexisting condition is one that first manifested or was treated within a stipulated period before the insured applied for the policy. This period is not necessarily limited to one year.

Front 16

Which of the following statements regarding persons participating in an HMO is CORRECT?

* A) They pay for health care services as they are incurred, at a rate discounted for the HMO.
* B) They pay for health care services as they are incurred.
* C) They negotiate health care service fees with contracted HMO providers.
* D) They pay a fixed periodic fee whether or not health care services are used.

Back 16

D

Persons participating in an HMO pay a fixed periodic fee in advance for services performed by participating physicians and hospitals. This fee is payable, whether or not the participant uses any health care service.

Front 17

Which of the following is NOT a means by which insurers control how policyholders use their health insurance coverage?

* A) Indemnification of medical expenses.
* B) Ambulatory surgery.
* C) Precertification review.
* D) Mandatory second opinions.

Back 17

A

Indemnification under a hospital indemnity policy simply pays a daily, weekly, or monthly indemnity of a specified amount based on the number of days the insured is hospitalized. It is not a means of paying a medical claim or a means by which the insurer controls how the insured uses his coverage.

Front 18

All of the following are considered basic health care services offered by HMOs EXCEPT:

* A) rehabilitative and home health services.
* B) x-ray services.
* C) emergency care.
* D) inpatient hospital care.

Back 18

A

Basic health care services include emergency care, inpatient hospital and physician care, outpatient medical and chiropractic services, laboratory and x-ray services, coverage for certain low-protein food products, optional coverage for mental health services for alcohol or drug abuse, and chiropractic services on a referral basis as an optional service. Rehabilitative and home health services are not considered basic health care services; instead, they are characterized as health care services.

Front 19

Which of the following statements about the grace period and reinstatement provisions in a health insurance policy is NOT correct?

* A) Craig's health policy has a grace period of 31 days. He had a premium due June 15, while he was on vacation. He returned home July 7 and mailed his premium the next day. The insurer received it July 10. His policy would have remained in force.
* B) Warren's medical expense policy was reinstated on September 30. He became ill and entered the hospital on October 5. His hospital expense will not be paid by the insurer.
* C) States may require grace periods of 7, 10, or 31 days, depending on the mode of premium payment or term of insurance. States may also set their own state specific grace periods as long as those periods are at least as favorable as those set in the model provisions act.
* D) Under a health policy's reinstatement terms, insured losses from accidental injuries and sickness are covered immediately after reinstatement.

Back 19

D

A policy that has lapsed may be reinstated. However, to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date. Losses due to accidental injury are covered immediately upon reinstatement of the policy. The other answer choices are correct statements.

Front 20

Which of the following descriptions characterize a health reimbursement account (HRA)?

* A) A tax-exempt trust or account designed to pay for qualified medical expenses of the account holder.
* B) An employer-funded account that pays employees for qualified medical expenses they incur.
* C) A tax-exempt trust or account in a financial institution in which the account holder saves money for qualified medical expenses.
* D) A cafeteria plan with several components.

Back 20

B

A health reimbursement account is an employer-funded account that reimburses employees for qualified medical expenses. A health savings account is a tax-exempt trust or account that pays for qualified medical expenses. A medical savings account is a tax-exempt trust or account in a financial institution in which one saves money to pay for qualified medical expenses. A flexible spending account is a cafeteria plan with three components: health insurance premiums, qualified medical expenses, and dependent care expenses.

Front 21

As chief executive officer of the Department of Banking and Insurance, the Commissioner of Insurance may do all of the following EXCEPT:

* A) make insurance laws.
* B) adopt rules and regulations.
* C) hold hearings.
* D) issue cease and desist orders.

Back 21

A