Fundamentals of Insurance - Chapter 3 Exam Questions with Verified Answers Graded A+ (100%
Correct)
COBRA (Consolidated Omnibus Budget Reduction Act) - Answers a health plan allowing people to stay
insured between jobs, while changing jobs, or in the case of death or divorce; gives employees of
companies employing 20 or more people the right to continue their group coverage at their own
expense
Copayment - Answers a small amount of money paid by a health insurance policyholder at the time of
medical treatment
Entitlement programs - Answers health insurance, such as Medicare and Medicaid, provided by the
federal and state governments for the citizens deemed most in need of assistance
Fee-for-service (FFS) plan - Answers a health insurance plan in which the insured shares the cost of the
medical service with the insurer, usually a 20/80 ratio after the insured satisfies the deductible
Health Maintenance Organizations (HMOs) - Answers the least expensive health care plan that includes
a primary care physician who serves as a gatekeeper to other services
HIPAA (Health Insurance Portability and Accountability Act) - Answers a health plan allowing people to
stay eligible for insurance between jobs, while changing jobs, or in the case of death or divorce; applies
to all group health policies no matter what size, employer based or not
Internal limits - Answers the maximum amount a health insurer will pay per day for medical treatment
Law of large numbers - Answers protection against financial loss by insurance companies achieved by
spreading the risk of costly medical care among many customers over many years
Lifetime limit - Answers the maximum a health insurer will pay in the insured's lifetime
Managed care - Answers a health insurance plan that provides comprehensive medical care to all
members, who pay a premium; the principle behind managed care is economy through volume
Medicaid - Answers government-provided medical assistance for eligible individuals and families with
low incomes and resources
Medicare - Answers government-provided health insurance for individuals age 65 or older, under age 65
with certain disabilities, and any age with end-stage renal disease
Medigap (Medical Supplement Insurance) - Answers health insurance policies designed to cover
expenses not covered by Medicare and sold by private insurance companies
Per claim maximum - Answers the maximum amount of money a health insurer will pay for any single
claim
Correct)
COBRA (Consolidated Omnibus Budget Reduction Act) - Answers a health plan allowing people to stay
insured between jobs, while changing jobs, or in the case of death or divorce; gives employees of
companies employing 20 or more people the right to continue their group coverage at their own
expense
Copayment - Answers a small amount of money paid by a health insurance policyholder at the time of
medical treatment
Entitlement programs - Answers health insurance, such as Medicare and Medicaid, provided by the
federal and state governments for the citizens deemed most in need of assistance
Fee-for-service (FFS) plan - Answers a health insurance plan in which the insured shares the cost of the
medical service with the insurer, usually a 20/80 ratio after the insured satisfies the deductible
Health Maintenance Organizations (HMOs) - Answers the least expensive health care plan that includes
a primary care physician who serves as a gatekeeper to other services
HIPAA (Health Insurance Portability and Accountability Act) - Answers a health plan allowing people to
stay eligible for insurance between jobs, while changing jobs, or in the case of death or divorce; applies
to all group health policies no matter what size, employer based or not
Internal limits - Answers the maximum amount a health insurer will pay per day for medical treatment
Law of large numbers - Answers protection against financial loss by insurance companies achieved by
spreading the risk of costly medical care among many customers over many years
Lifetime limit - Answers the maximum a health insurer will pay in the insured's lifetime
Managed care - Answers a health insurance plan that provides comprehensive medical care to all
members, who pay a premium; the principle behind managed care is economy through volume
Medicaid - Answers government-provided medical assistance for eligible individuals and families with
low incomes and resources
Medicare - Answers government-provided health insurance for individuals age 65 or older, under age 65
with certain disabilities, and any age with end-stage renal disease
Medigap (Medical Supplement Insurance) - Answers health insurance policies designed to cover
expenses not covered by Medicare and sold by private insurance companies
Per claim maximum - Answers the maximum amount of money a health insurer will pay for any single
claim
