RMIN 4000 EXAM 1 BROWN PRACTICE
QUESTIONS AND ANSWERS FULL REVIEW
SHEET
●● Copayment
Answer: A flat amount the insured must pay for certain benefits, such as
an office visit or generic drug. Does not count towards annual
deductible.
Examples :
-$25 for visit to primary care physician.
-$5 for a generic drug (prescription).
●● Calendar-Year Deductible
Answer: • An aggregate deductible that must be satisfied during the
calendar year.
• The amount the insured is responsible for in total (over all claims
during the policy period) before the insurer pays anything.
• Policies may include an individual and/or family deductible.
●● Coinsurance
Answer: • The percentage of the bill in excess of the deductible, which
the insured must pay out-of-pocket up to some maximum annual dollar
limit.
,Helps to prevent overutilization of plan benefits.
Typically 20%, 25%, or 30%.
●● Out-of-Pocket (OOP) Maximum Limit
Answer: • The most the insured will have to pay out-of-pocket in a
calendar year.
• After the out-of-pocket limit is met, the insurer pays 100% of all
eligible expenses.
• Also called a stop-loss limit.
●● Jon Snow was recently stabbed with resulting medical bills of
$4,000. His health insurance includes the following:
• $1,000 calendar- year deductible
• 80/20 coinsurance clause
• $5,000 out-of-pocket max
1. After insurance is applied, how much will Jon owe for the medical
bill?
2. Jon needs surgery during the same calendar year that costs $30,000.
After insurance is applied, how much will Jon owe for the surgery?
Answer: 4,000-1,000 (deductible) = 3,000
3,000 *.20 = 600
Consider the out of pocket max, John already paid 1,000 (deductible) +
600 (coinsurance).
5,000 - 1,600 = 3,400 is all Jon will pay for the 30,000 dollar surgery
,●● Individual Medical Expense (Health) Insurance
Answer: • Protects an individual or family for covered medical expenses
because of sickness or injury.
• Important in providing health insurance to individuals and families
who are not able to purchase group insurance (through their employer).
●● Group Medical Expense (Health) Insurance
Answer: • Employee benefit that pays the cost of hospital care,
physicians' and surgeons' fees, and related medical expenses.
• Usually provided through a managed care plan.
●● Managed Care Plan
Answer: • Medical expense plan that provides covered services to the
members in a cost-effective manner.
Choice of physicians and hospitals may be limited.
Includes HMO, PPO, and POS plans.
●● Health Maintenance Organization (HMO)
Answer: • System that provides healthcare to its members on a prepaid
basis in a particular area.
• Negotiates rates/agreements with hospitals and physicians to provide
medical services.
May own hospitals and employ physicians.
, Choice of providers (doctors/hospitals) is limited.
●● Structure of HMO
Answer: 1. Employee enrolls in HMO plan.
2. Employee selects Primary Care Physician (PCP) from
the HMO's network of doctors.
3. PCP acts as a "gatekeeper." You must receive a referral from the PCP
to see a specialist.
●● HMO - Capitation Fee
Answer: • Many HMO plans do not pay based on an FFS (fee-for
service).
• Instead, physicians and medical groups are paid a fixed annual amount
for each plan member regardless of the frequency or type of service
provided.
• Shifts risk of overutilization to the medical provider.
●● HMO Advantages & Disadvantages
Answer: • Advantages
-Although premiums are high, annual costs may be lower because cost-
sharing is lower (coinsurance, deductibles).
-Broad care; usually good communication between providers.
• Disadvantages
QUESTIONS AND ANSWERS FULL REVIEW
SHEET
●● Copayment
Answer: A flat amount the insured must pay for certain benefits, such as
an office visit or generic drug. Does not count towards annual
deductible.
Examples :
-$25 for visit to primary care physician.
-$5 for a generic drug (prescription).
●● Calendar-Year Deductible
Answer: • An aggregate deductible that must be satisfied during the
calendar year.
• The amount the insured is responsible for in total (over all claims
during the policy period) before the insurer pays anything.
• Policies may include an individual and/or family deductible.
●● Coinsurance
Answer: • The percentage of the bill in excess of the deductible, which
the insured must pay out-of-pocket up to some maximum annual dollar
limit.
,Helps to prevent overutilization of plan benefits.
Typically 20%, 25%, or 30%.
●● Out-of-Pocket (OOP) Maximum Limit
Answer: • The most the insured will have to pay out-of-pocket in a
calendar year.
• After the out-of-pocket limit is met, the insurer pays 100% of all
eligible expenses.
• Also called a stop-loss limit.
●● Jon Snow was recently stabbed with resulting medical bills of
$4,000. His health insurance includes the following:
• $1,000 calendar- year deductible
• 80/20 coinsurance clause
• $5,000 out-of-pocket max
1. After insurance is applied, how much will Jon owe for the medical
bill?
2. Jon needs surgery during the same calendar year that costs $30,000.
After insurance is applied, how much will Jon owe for the surgery?
Answer: 4,000-1,000 (deductible) = 3,000
3,000 *.20 = 600
Consider the out of pocket max, John already paid 1,000 (deductible) +
600 (coinsurance).
5,000 - 1,600 = 3,400 is all Jon will pay for the 30,000 dollar surgery
,●● Individual Medical Expense (Health) Insurance
Answer: • Protects an individual or family for covered medical expenses
because of sickness or injury.
• Important in providing health insurance to individuals and families
who are not able to purchase group insurance (through their employer).
●● Group Medical Expense (Health) Insurance
Answer: • Employee benefit that pays the cost of hospital care,
physicians' and surgeons' fees, and related medical expenses.
• Usually provided through a managed care plan.
●● Managed Care Plan
Answer: • Medical expense plan that provides covered services to the
members in a cost-effective manner.
Choice of physicians and hospitals may be limited.
Includes HMO, PPO, and POS plans.
●● Health Maintenance Organization (HMO)
Answer: • System that provides healthcare to its members on a prepaid
basis in a particular area.
• Negotiates rates/agreements with hospitals and physicians to provide
medical services.
May own hospitals and employ physicians.
, Choice of providers (doctors/hospitals) is limited.
●● Structure of HMO
Answer: 1. Employee enrolls in HMO plan.
2. Employee selects Primary Care Physician (PCP) from
the HMO's network of doctors.
3. PCP acts as a "gatekeeper." You must receive a referral from the PCP
to see a specialist.
●● HMO - Capitation Fee
Answer: • Many HMO plans do not pay based on an FFS (fee-for
service).
• Instead, physicians and medical groups are paid a fixed annual amount
for each plan member regardless of the frequency or type of service
provided.
• Shifts risk of overutilization to the medical provider.
●● HMO Advantages & Disadvantages
Answer: • Advantages
-Although premiums are high, annual costs may be lower because cost-
sharing is lower (coinsurance, deductibles).
-Broad care; usually good communication between providers.
• Disadvantages
