Medical Expense Insurance Exam
Review with Complete Solutions
A Health Reimbursement Arrangement MUST be established - ANSWER-by the
employer
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? - ANSWER-In this situation, the insured's maximum out-of-
pocket expenses for 2013 would be $1,000.
A major medical policy typically - ANSWER-A major medical policy provides benefits for
reasonable and necessary medical expenses, subject to policy limits.
All of the following statements about Major Medical benefits are true EXCEPT -
ANSWER-Benefits have no maximum limit
-Major medical benefits normally have a maximum limit
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? - ANSWER-In this situation, $5,000 + 20% of
the remaining bill = $7,000
Basic Medical Expense insurance - ANSWER-has lower benefit limits than Major
Medical Insurance
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical
policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C
will pay if the covered medical expenses are $2000? - ANSWER-The correct answer is
"$720". In this situation, $400 deductible + 20% of the remaining medical bill = $720.
Comprehensive Major Medical policies usually combine - ANSWER-A Comprehensive
Major Medical Policy combines Basic Hospital/Surgical and Major Medical insurance.
Deductibles are used in health policies to lower - ANSWER-One of the primary reasons
for using deductibles in health policies is to reduce the overuse of medical services.
In Major Medical Expense policies, what is the intent of a Stop Loss provision? -
ANSWER-limits an insured's out-of-pocket medical expenses
Review with Complete Solutions
A Health Reimbursement Arrangement MUST be established - ANSWER-by the
employer
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? - ANSWER-In this situation, the insured's maximum out-of-
pocket expenses for 2013 would be $1,000.
A major medical policy typically - ANSWER-A major medical policy provides benefits for
reasonable and necessary medical expenses, subject to policy limits.
All of the following statements about Major Medical benefits are true EXCEPT -
ANSWER-Benefits have no maximum limit
-Major medical benefits normally have a maximum limit
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? - ANSWER-In this situation, $5,000 + 20% of
the remaining bill = $7,000
Basic Medical Expense insurance - ANSWER-has lower benefit limits than Major
Medical Insurance
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical
policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C
will pay if the covered medical expenses are $2000? - ANSWER-The correct answer is
"$720". In this situation, $400 deductible + 20% of the remaining medical bill = $720.
Comprehensive Major Medical policies usually combine - ANSWER-A Comprehensive
Major Medical Policy combines Basic Hospital/Surgical and Major Medical insurance.
Deductibles are used in health policies to lower - ANSWER-One of the primary reasons
for using deductibles in health policies is to reduce the overuse of medical services.
In Major Medical Expense policies, what is the intent of a Stop Loss provision? -
ANSWER-limits an insured's out-of-pocket medical expenses
