RMIN 4000 Exam 4 Brown UGA
questions with verified answers
Cost Sharing in Health Insurance - correct answer ✔✔• Copayments • Deductibles
• Coinsurance
• Out-of-Pocket Maximum Limits
Copayment - correct 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 - correct 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 - correct 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 - correct 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? - correct 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 - correct 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 - correct 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 - correct 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) - correct 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 - correct 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 - correct 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 - correct 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
-Little to no out of network coverage.
-Must get referrals through PCP.o If you join an HMO, you'll likely have to change doctors.
questions with verified answers
Cost Sharing in Health Insurance - correct answer ✔✔• Copayments • Deductibles
• Coinsurance
• Out-of-Pocket Maximum Limits
Copayment - correct 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 - correct 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 - correct 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 - correct 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? - correct 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 - correct 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 - correct 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 - correct 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) - correct 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 - correct 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 - correct 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 - correct 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
-Little to no out of network coverage.
-Must get referrals through PCP.o If you join an HMO, you'll likely have to change doctors.
