Health Insurance Fundamentals Exam
UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Insurance - CORRECT ANSWER Purchase of protection against risk of substantial financial
loss due to an adverse event
*Goal is not to improve health*
Forms in health care:
private (commercial, managed care)
public (government)
employer (self-insured, workers' comp)
Contract w/ Beneficiary (subscriber) - CORRECT ANSWER -> Eligibility for the policy- age,
preexisting conditions, time working, occupation, risk profile, etc.
-> Covered events- illness, injury, that may/may not be covered
-> Covered services
-> Cost limits (cost sharing)- what benefits insurance company; amt of out of pocket expense, limit to
total $ spent
@ working age: contracts typically negotiated by employer
Contract w/ Provider - CORRECT ANSWER Covered services- what will payer cover?
Payment
- Method- fee schedule, retrospective payment, etc
- Circumstances- who's qualified to deliver service?
Negotiated by hospital, or individual therapists
General Plan Types - CORRECT ANSWER Indemnity & Service
Indemnity Plan - CORRECT ANSWER - provides reimbursement to insured without regard to
the expenses actually incurred
- fixed cash amount per day to beneficiary when they access care (pre-determined)
, -criteria that beneficiary must meet
*designed to cover out of pocket expenses*
-supplemental, secondary form of support
ie- Aflac- help cover "extra costs"
Service Policy Plan - CORRECT ANSWER Provides specified services to insured via payment
to provider
-reflects cost of care more directly
- typically provider is the one that takes on the financial risk (pays, submits claim, waits for
reimbursement)
Group Private Insurance - CORRECT ANSWER What you get with your employer
Benefits associated with ill health
--> Basic benefits: medical, dental, vision, prescriptions
--> Disability: short- temporarily disabled; cancer
and/or long term- ongoing health needs; chronic
Large pool of people across which risk is distributed: employees "pay-in" with a premium
Individual Private Health Insurance - CORRECT ANSWER No employer intermediary
Risk determined by each individual's health status & demographics
--> Self-employed, employees of small firms, early retiree, family farmer
--> Premiums usually much higher than group plans because do not have a large pool of resources to
share & distribute risk
Private Insurance Organizations - CORRECT ANSWER --> For Profit, Commercial (Payer
Only)
ie- Aetna, Cigna, United Health Care
--> Not-for-Profit, Commercial (Payer Only)
i.e.- Blue Cross / Blue Shield
--> Managed Care Organizations (MCOs)
- Payer that is also the provider
- Traditional payers: offer MCO versions
UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Insurance - CORRECT ANSWER Purchase of protection against risk of substantial financial
loss due to an adverse event
*Goal is not to improve health*
Forms in health care:
private (commercial, managed care)
public (government)
employer (self-insured, workers' comp)
Contract w/ Beneficiary (subscriber) - CORRECT ANSWER -> Eligibility for the policy- age,
preexisting conditions, time working, occupation, risk profile, etc.
-> Covered events- illness, injury, that may/may not be covered
-> Covered services
-> Cost limits (cost sharing)- what benefits insurance company; amt of out of pocket expense, limit to
total $ spent
@ working age: contracts typically negotiated by employer
Contract w/ Provider - CORRECT ANSWER Covered services- what will payer cover?
Payment
- Method- fee schedule, retrospective payment, etc
- Circumstances- who's qualified to deliver service?
Negotiated by hospital, or individual therapists
General Plan Types - CORRECT ANSWER Indemnity & Service
Indemnity Plan - CORRECT ANSWER - provides reimbursement to insured without regard to
the expenses actually incurred
- fixed cash amount per day to beneficiary when they access care (pre-determined)
, -criteria that beneficiary must meet
*designed to cover out of pocket expenses*
-supplemental, secondary form of support
ie- Aflac- help cover "extra costs"
Service Policy Plan - CORRECT ANSWER Provides specified services to insured via payment
to provider
-reflects cost of care more directly
- typically provider is the one that takes on the financial risk (pays, submits claim, waits for
reimbursement)
Group Private Insurance - CORRECT ANSWER What you get with your employer
Benefits associated with ill health
--> Basic benefits: medical, dental, vision, prescriptions
--> Disability: short- temporarily disabled; cancer
and/or long term- ongoing health needs; chronic
Large pool of people across which risk is distributed: employees "pay-in" with a premium
Individual Private Health Insurance - CORRECT ANSWER No employer intermediary
Risk determined by each individual's health status & demographics
--> Self-employed, employees of small firms, early retiree, family farmer
--> Premiums usually much higher than group plans because do not have a large pool of resources to
share & distribute risk
Private Insurance Organizations - CORRECT ANSWER --> For Profit, Commercial (Payer
Only)
ie- Aetna, Cigna, United Health Care
--> Not-for-Profit, Commercial (Payer Only)
i.e.- Blue Cross / Blue Shield
--> Managed Care Organizations (MCOs)
- Payer that is also the provider
- Traditional payers: offer MCO versions
