Health Insurance Exam Questions and
Answers Latest Version Already Passed
What is the purpose of health insurance?
✔✔ To provide financial protection against medical costs and access to healthcare services.
What does a premium refer to in health insurance?
✔✔ The amount paid regularly (monthly or annually) to maintain the insurance coverage.
What is a deductible in health insurance?
✔✔ The amount a policyholder must pay out-of-pocket before the insurance company begins to
pay.
What is a copayment?
✔✔ A fixed fee a patient pays for a covered healthcare service at the time of receiving it.
What does coinsurance mean in a health insurance policy?
✔✔ The percentage of costs a patient pays after meeting the deductible, with the insurer paying
the rest.
1
,What is the role of a policyholder?
✔✔ The person who owns the health insurance policy and is responsible for paying premiums.
Why is it important to understand policy exclusions?
✔✔ Because exclusions specify what medical services or conditions are not covered by the
insurance plan.
What is meant by “pre-existing condition” in health insurance?
✔✔ A health problem that existed before the start date of a new insurance policy.
What is the difference between an HMO and a PPO?
✔✔ HMO requires choosing a primary care provider and referrals; PPO offers more flexibility to
see specialists without referrals.
What does “out-of-pocket maximum” mean?
✔✔ The most a policyholder has to pay for covered services in a year before insurance pays
100%.
2
,Why might someone choose a high deductible health plan?
✔✔ To pay lower premiums while taking on higher out-of-pocket costs if medical care is
needed.
What is an Explanation of Benefits (EOB)?
✔✔ A statement sent by the insurer explaining what costs were covered, what the patient owes,
and how the claim was processed.
What is the purpose of a network in health insurance?
✔✔ To provide a group of preferred providers offering services at negotiated rates to reduce
costs for patients and insurers.
Why is preventive care often covered without cost-sharing?
✔✔ To encourage early detection and health maintenance, reducing long-term healthcare
expenses.
What is a formulary in health insurance?
✔✔ A list of prescription drugs covered by a health insurance plan.
3
, How does health insurance protect against catastrophic medical expenses?
✔✔ By limiting the patient’s financial liability through coverage and out-of-pocket maximums.
What is meant by “coverage limit” in health insurance?
✔✔ The maximum amount an insurer will pay for certain services or during a policy period.
Why is it important to review the Summary of Benefits and Coverage (SBC)?
✔✔ It helps policyholders understand what services are covered, costs, and any limits or
exclusions.
What is the difference between in-network and out-of-network providers?
✔✔ In-network providers have contracts with insurers to accept negotiated rates; out-of-network
providers do not and typically cost more.
What does “underwriting” refer to in health insurance?
✔✔ The process insurers use to evaluate risk and decide premiums or eligibility.
4
Answers Latest Version Already Passed
What is the purpose of health insurance?
✔✔ To provide financial protection against medical costs and access to healthcare services.
What does a premium refer to in health insurance?
✔✔ The amount paid regularly (monthly or annually) to maintain the insurance coverage.
What is a deductible in health insurance?
✔✔ The amount a policyholder must pay out-of-pocket before the insurance company begins to
pay.
What is a copayment?
✔✔ A fixed fee a patient pays for a covered healthcare service at the time of receiving it.
What does coinsurance mean in a health insurance policy?
✔✔ The percentage of costs a patient pays after meeting the deductible, with the insurer paying
the rest.
1
,What is the role of a policyholder?
✔✔ The person who owns the health insurance policy and is responsible for paying premiums.
Why is it important to understand policy exclusions?
✔✔ Because exclusions specify what medical services or conditions are not covered by the
insurance plan.
What is meant by “pre-existing condition” in health insurance?
✔✔ A health problem that existed before the start date of a new insurance policy.
What is the difference between an HMO and a PPO?
✔✔ HMO requires choosing a primary care provider and referrals; PPO offers more flexibility to
see specialists without referrals.
What does “out-of-pocket maximum” mean?
✔✔ The most a policyholder has to pay for covered services in a year before insurance pays
100%.
2
,Why might someone choose a high deductible health plan?
✔✔ To pay lower premiums while taking on higher out-of-pocket costs if medical care is
needed.
What is an Explanation of Benefits (EOB)?
✔✔ A statement sent by the insurer explaining what costs were covered, what the patient owes,
and how the claim was processed.
What is the purpose of a network in health insurance?
✔✔ To provide a group of preferred providers offering services at negotiated rates to reduce
costs for patients and insurers.
Why is preventive care often covered without cost-sharing?
✔✔ To encourage early detection and health maintenance, reducing long-term healthcare
expenses.
What is a formulary in health insurance?
✔✔ A list of prescription drugs covered by a health insurance plan.
3
, How does health insurance protect against catastrophic medical expenses?
✔✔ By limiting the patient’s financial liability through coverage and out-of-pocket maximums.
What is meant by “coverage limit” in health insurance?
✔✔ The maximum amount an insurer will pay for certain services or during a policy period.
Why is it important to review the Summary of Benefits and Coverage (SBC)?
✔✔ It helps policyholders understand what services are covered, costs, and any limits or
exclusions.
What is the difference between in-network and out-of-network providers?
✔✔ In-network providers have contracts with insurers to accept negotiated rates; out-of-network
providers do not and typically cost more.
What does “underwriting” refer to in health insurance?
✔✔ The process insurers use to evaluate risk and decide premiums or eligibility.
4
