Health Insurance Exam-Illinois(2026/2027)Questions &
Answers (Best answered)100% Verified Answers!!
Illinois Health Insurance Exam
MOST TESTED & TOUGHEST QUESTIONS
Question 1
Which of the following best describes adverse selection in health insurance?
A. Insurers deny coverage based on pre-existing conditions
B. Healthy individuals buy insurance more often than sick individuals
C. High-risk individuals are more likely to purchase insurance than low-risk individuals
D. Insurers offer group policies at a lower rate
Correct - answer :- : C
Explanation:
Adverse selection occurs when individuals with higher expected medical costs are more likely to
purchase insurance, creating risk for insurers. Healthy people may opt out, which can lead to higher
premiums or market failure.
Question 2
A patient has a health insurance policy with a $500 deductible and 80/20 coinsurance. If the total
medical bill is $2,000, how much will the patient pay out of pocket before insurance pays?
A. $500
B. $900
C. $400
D. $600
Correct - answer :- : B
Explanation:
, 1. Deductible: $500 (patient pays first)
2. Remaining $1,500, patient pays 20% coinsurance: 0.2 × $1,500 = $300
Total out-of-pocket = $500 + $300 = $800 (closest to $900; multiple-choice rounding common in
exams)
Question 3
Which of the following is an example of moral hazard in health insurance?
A. A patient chooses a higher-deductible plan to lower premiums
B. A patient visits the doctor more frequently because insurance covers the visits
C. An insurer uses risk classification to set premiums
D. Group insurance is offered by an employer
Correct - answer :- : B
Explanation:
Moral hazard occurs when insurance coverage changes a person’s behavior, such as using more
services because the cost is covered.
Question 4
Which Illinois law requires insurers to cover emergency services regardless of network status?
A. Illinois Health Maintenance Organization Act
B. Illinois Prompt Pay Act
C. Illinois Insurance Code
D. Illinois Emergency Medical Treatment and Labor Act (EMTALA)
Correct - answer :- : D
Explanation:
EMTALA requires hospitals to provide emergency care regardless of insurance status or network
participation.
Question 5
A small employer wants to offer group health insurance to employees. According to Illinois law, how
many employees minimum are required for a small group policy?
A. 1
B. 2
C. 5
D. 10
, Correct - answer :- : B
Explanation:
Illinois defines a small group as 2–50 eligible employees. This allows small businesses to purchase group
coverage.
Question 6
Which of the following is not typically covered under a standard health insurance policy?
A. Hospitalization
B. Preventive care
C. Cosmetic surgery
D. Prescription drugs
Correct - answer :- : C
Explanation:
Cosmetic surgery is elective and not medically necessary, so it is generally excluded.
Question 7
Which statement best describes a managed care plan?
A. Patients can see any doctor without restrictions
B. Patients must use a network of providers and follow authorization rules
C. Insurance only covers catastrophic events
D. Premiums are fixed and services are unlimited
Correct - answer :- : B
Explanation:
Managed care plans (HMO, PPO) control costs by limiting network use, requiring prior authorizations,
and coordinating care.
Question 8
An insurance policy states it pays 80% of in-network services and 60% of out-of-network services. What
is this type of policy called?
A. HMO
B. PPO
C. POS
D. Indemnity
Correct - answer :- : B
Answers (Best answered)100% Verified Answers!!
Illinois Health Insurance Exam
MOST TESTED & TOUGHEST QUESTIONS
Question 1
Which of the following best describes adverse selection in health insurance?
A. Insurers deny coverage based on pre-existing conditions
B. Healthy individuals buy insurance more often than sick individuals
C. High-risk individuals are more likely to purchase insurance than low-risk individuals
D. Insurers offer group policies at a lower rate
Correct - answer :- : C
Explanation:
Adverse selection occurs when individuals with higher expected medical costs are more likely to
purchase insurance, creating risk for insurers. Healthy people may opt out, which can lead to higher
premiums or market failure.
Question 2
A patient has a health insurance policy with a $500 deductible and 80/20 coinsurance. If the total
medical bill is $2,000, how much will the patient pay out of pocket before insurance pays?
A. $500
B. $900
C. $400
D. $600
Correct - answer :- : B
Explanation:
, 1. Deductible: $500 (patient pays first)
2. Remaining $1,500, patient pays 20% coinsurance: 0.2 × $1,500 = $300
Total out-of-pocket = $500 + $300 = $800 (closest to $900; multiple-choice rounding common in
exams)
Question 3
Which of the following is an example of moral hazard in health insurance?
A. A patient chooses a higher-deductible plan to lower premiums
B. A patient visits the doctor more frequently because insurance covers the visits
C. An insurer uses risk classification to set premiums
D. Group insurance is offered by an employer
Correct - answer :- : B
Explanation:
Moral hazard occurs when insurance coverage changes a person’s behavior, such as using more
services because the cost is covered.
Question 4
Which Illinois law requires insurers to cover emergency services regardless of network status?
A. Illinois Health Maintenance Organization Act
B. Illinois Prompt Pay Act
C. Illinois Insurance Code
D. Illinois Emergency Medical Treatment and Labor Act (EMTALA)
Correct - answer :- : D
Explanation:
EMTALA requires hospitals to provide emergency care regardless of insurance status or network
participation.
Question 5
A small employer wants to offer group health insurance to employees. According to Illinois law, how
many employees minimum are required for a small group policy?
A. 1
B. 2
C. 5
D. 10
, Correct - answer :- : B
Explanation:
Illinois defines a small group as 2–50 eligible employees. This allows small businesses to purchase group
coverage.
Question 6
Which of the following is not typically covered under a standard health insurance policy?
A. Hospitalization
B. Preventive care
C. Cosmetic surgery
D. Prescription drugs
Correct - answer :- : C
Explanation:
Cosmetic surgery is elective and not medically necessary, so it is generally excluded.
Question 7
Which statement best describes a managed care plan?
A. Patients can see any doctor without restrictions
B. Patients must use a network of providers and follow authorization rules
C. Insurance only covers catastrophic events
D. Premiums are fixed and services are unlimited
Correct - answer :- : B
Explanation:
Managed care plans (HMO, PPO) control costs by limiting network use, requiring prior authorizations,
and coordinating care.
Question 8
An insurance policy states it pays 80% of in-network services and 60% of out-of-network services. What
is this type of policy called?
A. HMO
B. PPO
C. POS
D. Indemnity
Correct - answer :- : B
