Health Insurance Practice Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

Health Insurance Practice Questions and Answers | Latest Version | 2025/2026 | Correct & Verified What does a premium mean in health insurance? The amount paid regularly to keep coverage active What is a deductible? The amount paid out-of-pocket before insurance starts paying What does copayment refer to? A fixed amount paid for a healthcare service What is coinsurance? The percentage of costs shared between insurer and patient Why do people buy health insurance? To reduce financial risk from medical expenses What is an insurance policy? A legal contract between the insurer and the insured What does coverage mean in health insurance? 2 The services and benefits the plan pays for What is an in-network provider? A healthcare provider contracted with the insurer Why are in-network services cheaper? They have agreed lower rates with the insurer What is an out-of-network provider? A provider not contracted with the insurance plan What is a claim in health insurance? A request for payment sent to the insurer Who usually submits insurance claims? The healthcare provider What is prior authorisation? Approval required before certain services are covered Why is prior authorisation used? To control costs and ensure medical necessity 3 What does policyholder mean? The person who owns the insurance policy What is a dependent in health insurance? A family member covered under the policy What does exclusion mean in an insurance policy? Services that are not covered What is a benefit limit? The maximum amount the insurer will pay What is a waiting period? Time before certain benefits become available Why do insurers use waiting periods? To prevent immediate high-cost claims What is a formulary? A list of covered prescription drugs 4 Why are generic drugs encouraged? They cost less than brand-name drugs What is a referral? Approval to see a specialist Why are referrals required in some plans? To coordinate care and reduce costs