CDHP: Comprehensive Health Insurance
Practice Questions with Verified Correct Answers
Indemnity plan
Provision of security against a hurt, loss, or damage with specific cash payments.
Policyholder
Party to an insurance arrangement who is secured against losses and provided benefits or
services.
Insurer
Party to an insurance arrangement who undertakes to indemnify for losses, provide benefits, or
render services.
Coinsurance
Provision stating that the insured and the insurer will share all losses covered by the policy in a
proportion agreed upon in advance. For example, an 80-20 policy means that the insurer pays
80 percent and the insured pays 20 percent of expenses.
Out-of-pocket expenses
Amount not covered by insurance that the covered (or insured) person must pay out of his or
her own pocket, such as coinsurance and deductible.
Retrospective payment system
A system wherein reim- bursement is made to providers after health care services have been
given.
Prospective payment system (PPS)
A system wherein reimbursement is made to the provider based on a predetermined
reimbursement level rather than on actual charges after the services have been provided.
Fee-for-service
, The method by which a physician or provider bills for each service or visit instead of on a pre-
paid (that is, all-inclusive) basis. This was the initial way that patients received treatment, for
which they usually paid cash.
Usual, customary, and reasonable charges (UCR)
Charges for health care services that are based on the physician's "usual" charge for the service,
which is the "customary" amount that other physicians in the area charge, and a "reasonable"
amount for the service performed.
Capitation
A rate paid by managed care plans, usually monthly, to a health care provider. In return, the
provider agrees to deliver the health services agreed upon to any person covered under the
managed care plan. The payment provided has no relationship to the type of service per-
formed or number of services the patient receives.
Premiums
Fees that are regular, pre-established amounts paid by the insured to the insurance company
who uses the money collected to pay claims submitted by others who have purchased
insurance.
Employer-based group insurance
Insurance provided by a company for its employees
PPO plan
(preferred provider organization)—Plan in which health care providers offer services at a
discounted rate to members
POS plan
(point-of-service plan)—Plan in which subscribers receive care from providers within a network,
but are allowed to pay a higher rate to see providers outside the network
Medicare Part A
Medical hospital insurance. People who meet the eligibility requirements can automatically
receive without paying a premium because they or their spouses paid Medicare taxes while
they were working.
Medicare Part B
Practice Questions with Verified Correct Answers
Indemnity plan
Provision of security against a hurt, loss, or damage with specific cash payments.
Policyholder
Party to an insurance arrangement who is secured against losses and provided benefits or
services.
Insurer
Party to an insurance arrangement who undertakes to indemnify for losses, provide benefits, or
render services.
Coinsurance
Provision stating that the insured and the insurer will share all losses covered by the policy in a
proportion agreed upon in advance. For example, an 80-20 policy means that the insurer pays
80 percent and the insured pays 20 percent of expenses.
Out-of-pocket expenses
Amount not covered by insurance that the covered (or insured) person must pay out of his or
her own pocket, such as coinsurance and deductible.
Retrospective payment system
A system wherein reim- bursement is made to providers after health care services have been
given.
Prospective payment system (PPS)
A system wherein reimbursement is made to the provider based on a predetermined
reimbursement level rather than on actual charges after the services have been provided.
Fee-for-service
, The method by which a physician or provider bills for each service or visit instead of on a pre-
paid (that is, all-inclusive) basis. This was the initial way that patients received treatment, for
which they usually paid cash.
Usual, customary, and reasonable charges (UCR)
Charges for health care services that are based on the physician's "usual" charge for the service,
which is the "customary" amount that other physicians in the area charge, and a "reasonable"
amount for the service performed.
Capitation
A rate paid by managed care plans, usually monthly, to a health care provider. In return, the
provider agrees to deliver the health services agreed upon to any person covered under the
managed care plan. The payment provided has no relationship to the type of service per-
formed or number of services the patient receives.
Premiums
Fees that are regular, pre-established amounts paid by the insured to the insurance company
who uses the money collected to pay claims submitted by others who have purchased
insurance.
Employer-based group insurance
Insurance provided by a company for its employees
PPO plan
(preferred provider organization)—Plan in which health care providers offer services at a
discounted rate to members
POS plan
(point-of-service plan)—Plan in which subscribers receive care from providers within a network,
but are allowed to pay a higher rate to see providers outside the network
Medicare Part A
Medical hospital insurance. People who meet the eligibility requirements can automatically
receive without paying a premium because they or their spouses paid Medicare taxes while
they were working.
Medicare Part B
