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

Health Insurance Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified What is the primary purpose of health insurance? To reduce the financial burden of medical expenses 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 begins to pay What does co-payment refer to? A fixed amount paid for a covered service What is coinsurance? The percentage of costs shared between insurer and insured What does in-network mean? Providers contracted with the insurance plan What is an out-of-network provider? 2 A provider not contracted with the insurance plan What is a policyholder? The person who owns the insurance policy What does coverage limit mean? The maximum amount an insurer will pay What is a benefit period? The time during which benefits are payable What is preauthorization? Approval required before certain services are covered What does exclusion mean in a policy? Services not covered by the insurance plan What is a waiting period? Time before coverage begins for certain services What is an Explanation of Benefits (EOB)? A statement explaining how a claim was processed 3 What does claim submission mean? Requesting payment from the insurer for services received What is a provider? A person or facility that delivers healthcare services What is managed care? A system controlling cost and quality of care What does HMO stand for? Health Maintenance Organization What is the main feature of an HMO? Care coordinated through a primary care provider What does PPO stand for? Preferred Provider Organization What is a key advantage of a PPO? Greater flexibility in choosing providers 4 What does POS plan mean? Point of Service plan What is the purpose of a referral? Authorization to see a specialist What is a formulary? A list of covered prescription drugs What does generic drug mean? A lower-cost equivalent to a brand-name drug What is prior approval in pharmacy benefits? Authorization needed before certain drugs are covered What is catastrophic coverage? Coverage for severe or high-cost medical events What does lifetime maximum mean? The total amount an insurer will pay over a lifetime What is an annual maximum? 5 The most an insurer will pay in one year What is risk pooling? Sharing risk among many insured individuals What is adverse selection? When higher-risk individuals are more likely to enroll What does underwriting involve? Evaluating risk to determine coverage terms What is group health insurance? Coverage provided to members of a group What is individual health insurance?