Medical Expense Insurance Exam 2023 Questions and
Answers with complete solution
An insured covered by a group Major Medical plan is hospitalized after sustaining
injuries that resulted from an automobile accident. Assuming the plan had a
$1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED
be responsible to pay with $11,000 in covered medical expenses?
The correct answer is "$3,000". In this situation, the insured is responsible for $1,000
deductible + 20% of the remaining bill = $3,000.
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Surgically removing a facial birthmark
Which of these is NOT a characteristic of a Health Reimbursement Arrangement
(HRA)?
Employee funds the HRA entirely
HRA plans are employer-funded medical reimbursement plans
Which of the following phrases refers to the fees charged by a healthcare
professional?
Usual, customary, and reasonable expenses
J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance
clause. If J is hospitalized and receives a bill for $10,000, J would pay
In this situation, $2,000 + 20% of the remaining bill = $3,600
10000-2000=8000 8000x20%=1600+2000
Which of the following statements BEST describes the intent of a Coinsurance
clause in a Major Medical policy?
Discourages overutilization of the insurance coverage
A purpose of the Coinsurance clause in a Major Medical Policy is to discourage
overutilization of the insurance coverage.
S wants to open a tax-exempt Health Savings Account. To qualify for this type of
account, Federal law dictates that S must be enrolled in a
High-deductible health plan
To be eligible for a Health Savings Account, an individual must be covered by a high-
deductible health plan (HDHP), must not be covered by other health insurance (does
not apply to accident insurance, disability, dental care, vision care, long-term care),
must not be eligible for Medicare, and can't be claimed as a dependent on someone
else's tax return.
Major Medical policies typically
contain a deductible and coinsurance
Which of the following BEST desscribes a Hospital Indemnity policy?
Coverage that pays a stated amount per day of a covered hospitalization
, The typical Hospital Indemnity policy pays a stated amount per day of a covered
hospitalization.
Which of the following statements BEST defines usual, customary, and
reasonable (UCR) charges?
The correct answer is "The maximum amount considered eligible for reimbursement by
an insurance company under a health plan". Usual, customary, and reasonable (UCR)
charges are the maximum amount the insurer will consider eligible for reimbursement
under a health insurance plan.
Basic Hospital and Surgical policy benefits are
lower than the actual expenses incurred
An individual has a Major Medical policy with a $5,000 deductible and an 80/20
Coinsurance clause. How much will the INSURED have to pay if a total of $15,000
in covered medical expenses are incurred?
$5,000 + 20% of the remaining bill = $7,000
A Hospital/Surgical Expense policy was purchased for a family of four in March of
2013. The policy was issued with a $500 deductible and a limit of four deductibles
per calendar year. Two claims were paid in September 2013, each incurring
medical expenses in excess of the deductible. Two additional claims were filed in
2014, each in excess of the deductible amount as well. What would be this
family's out-of-pocket medical expenses for 2013?
In this situation, the insured's maximum out-of-pocket expenses for 2013 would be
$1,000.
In order to establish a Health Reimbursement Arrangement (HRA), it MUST
The deductible can be expressed as a fixed dollar amount
The benefit period begins only after a specified amount of expenses have
accrued
Benefits are generally expressed as a percentage of eligible expenses
Benefits have no maximum limit
In order to establish a Health Reimbursement Arrangement (HRA), it must be
established by the employer.
All of the following statements about Major Medical benefits are true EXCEPT
Benefits have no maximum limit
A major medical policy typically
A major medical policy provides benefits for reasonable and necessary medical
expenses, subject to policy limits.
Comprehensive Major Medical policies usually combine
Major Medical with Basic Hospital/Surgical coverage
A prospective insured completes and signs an application for health insurance
but intentionally conceals information about a pre-existing heart condition. The
company issues the policy. Two months later, the insured suffers a heart attack
and submits a claim. While processing the claim, the company discovers the pre-
existing condition. In this situation, the company will
continue coverage but exclude the heart condition
If the insured did not cite the condition on the application and the insurer did not exclude
Answers with complete solution
An insured covered by a group Major Medical plan is hospitalized after sustaining
injuries that resulted from an automobile accident. Assuming the plan had a
$1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED
be responsible to pay with $11,000 in covered medical expenses?
The correct answer is "$3,000". In this situation, the insured is responsible for $1,000
deductible + 20% of the remaining bill = $3,000.
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Surgically removing a facial birthmark
Which of these is NOT a characteristic of a Health Reimbursement Arrangement
(HRA)?
Employee funds the HRA entirely
HRA plans are employer-funded medical reimbursement plans
Which of the following phrases refers to the fees charged by a healthcare
professional?
Usual, customary, and reasonable expenses
J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance
clause. If J is hospitalized and receives a bill for $10,000, J would pay
In this situation, $2,000 + 20% of the remaining bill = $3,600
10000-2000=8000 8000x20%=1600+2000
Which of the following statements BEST describes the intent of a Coinsurance
clause in a Major Medical policy?
Discourages overutilization of the insurance coverage
A purpose of the Coinsurance clause in a Major Medical Policy is to discourage
overutilization of the insurance coverage.
S wants to open a tax-exempt Health Savings Account. To qualify for this type of
account, Federal law dictates that S must be enrolled in a
High-deductible health plan
To be eligible for a Health Savings Account, an individual must be covered by a high-
deductible health plan (HDHP), must not be covered by other health insurance (does
not apply to accident insurance, disability, dental care, vision care, long-term care),
must not be eligible for Medicare, and can't be claimed as a dependent on someone
else's tax return.
Major Medical policies typically
contain a deductible and coinsurance
Which of the following BEST desscribes a Hospital Indemnity policy?
Coverage that pays a stated amount per day of a covered hospitalization
, The typical Hospital Indemnity policy pays a stated amount per day of a covered
hospitalization.
Which of the following statements BEST defines usual, customary, and
reasonable (UCR) charges?
The correct answer is "The maximum amount considered eligible for reimbursement by
an insurance company under a health plan". Usual, customary, and reasonable (UCR)
charges are the maximum amount the insurer will consider eligible for reimbursement
under a health insurance plan.
Basic Hospital and Surgical policy benefits are
lower than the actual expenses incurred
An individual has a Major Medical policy with a $5,000 deductible and an 80/20
Coinsurance clause. How much will the INSURED have to pay if a total of $15,000
in covered medical expenses are incurred?
$5,000 + 20% of the remaining bill = $7,000
A Hospital/Surgical Expense policy was purchased for a family of four in March of
2013. The policy was issued with a $500 deductible and a limit of four deductibles
per calendar year. Two claims were paid in September 2013, each incurring
medical expenses in excess of the deductible. Two additional claims were filed in
2014, each in excess of the deductible amount as well. What would be this
family's out-of-pocket medical expenses for 2013?
In this situation, the insured's maximum out-of-pocket expenses for 2013 would be
$1,000.
In order to establish a Health Reimbursement Arrangement (HRA), it MUST
The deductible can be expressed as a fixed dollar amount
The benefit period begins only after a specified amount of expenses have
accrued
Benefits are generally expressed as a percentage of eligible expenses
Benefits have no maximum limit
In order to establish a Health Reimbursement Arrangement (HRA), it must be
established by the employer.
All of the following statements about Major Medical benefits are true EXCEPT
Benefits have no maximum limit
A major medical policy typically
A major medical policy provides benefits for reasonable and necessary medical
expenses, subject to policy limits.
Comprehensive Major Medical policies usually combine
Major Medical with Basic Hospital/Surgical coverage
A prospective insured completes and signs an application for health insurance
but intentionally conceals information about a pre-existing heart condition. The
company issues the policy. Two months later, the insured suffers a heart attack
and submits a claim. While processing the claim, the company discovers the pre-
existing condition. In this situation, the company will
continue coverage but exclude the heart condition
If the insured did not cite the condition on the application and the insurer did not exclude
