State: Ohio | Category: Health Insurance | All tests in this Category:
Practice Test 1 Practice Test 21. What is the general rule about preexisting conditions under most modern health plans?
Under many modern health plans, preexisting conditions cannot be denied coverage; waiting periods or limitations may be subject to plan rules, not blanket denial.
2. What is a copayment (copay)?
Copays are fixed dollar amounts paid per visit or service, typically due at the time of service, and are separate from the deductible.
3. What does the term confinement usually mean in hospital indemnity policies?
Confinement refers to a period of inpatient hospital admission for which benefits are payable.
4. What does the Incontestability provision generally provide for after a policy has been in force for a specific period (usually 2 years)?
The incontestability provision generally states that after the policy has been in force for a specified period (commonly 2 years), the insurer cannot contest the policy based on misstatements, with fraud as an exception.
5. A copayment is best described as:
A copayment is a fixed dollar amount paid by the insured at the time of service, often for office visits or prescriptions.
6. How does misstatement of age or sex affect benefits under a health policy?
If a misstatement of age or sex is discovered, the insurer typically adjusts benefits to what the premium would have bought had the correct information been stated. Premiums may also be adjusted retroactively.
7. Group DI policies may include a 'conversion' provision. What does this allow?
Conversion allows converting a group DI policy to an individual policy without underwriting, subject to terms.
8. A policy that pays a fixed daily benefit regardless of actual hospital charges is known as a
Indemnity-based hospital coverage pays a fixed cash amount per day, not a reimbursement of actual charges.
9. In a managed care setting, what is a formulary and how does it relate to gatekeeping?
A formulary is a curated list of preferred drugs used to manage pharmaceutical benefits; prescribers may be guided or required to prescribe formulary medications, which ties into overall utilization management and gatekeeping goals.
10. Does marital status change, such as remarriage, automatically terminate COBRA continuation rights for a spouse or dependent child?
A spouse's remarriage does not automatically terminate COBRA rights; COBRA ends only due to specific events (e.g., premium nonpayment, new group coverage, death, divorce, Medicare eligibility) or at the end of the maximum period.
11. Does Ohio require a separate state mini-COBRA continuation for small employers (2–19 employees) beyond federal COBRA?
Ohio generally follows federal COBRA rules for continuation coverage and does not require a separate state mini-COBRA provision.
12. Are critical illness policies typically guaranteed renewable, and what does that mean for premiums?
Many CI policies are guaranteed renewable; insurers cannot cancel due to age, but premiums may increase with age or attained age as specified in the policy.
13. Which scenario best illustrates 'case management' in a provider network?
Case management involves coordinating care for complex conditions across multiple providers to optimize outcomes and costs. The other options describe less coordinated or inappropriate actions.
14. How do pre-existing conditions typically affect DI coverage?
Pre-existing condition clauses exclude or limit coverage for conditions that existed before the policy was issued.
15. Which statement best describes the Consideration clause in a health insurance policy?
In insurance contracts, the insured provides consideration (premium payments) and the insurer provides consideration (the promise to pay covered benefits when losses occur).
16. If the employer's group health plan terminates for all participants, what happens to COBRA continuation rights?
If the employer's plan terminates entirely, there is no coverage to continue via COBRA, so continuation ends.
17. Which feature helps individuals budget for medical costs by providing predictable costs at the point of service?
Copayments are fixed amounts paid at the time of service, providing predictable costs; coinsurance is a percentage of costs after the deductible.
18. What is a pre-existing condition exclusion?
A pre-existing condition exclusion is a condition diagnosed or treated before policy issue that may be excluded or limited for a specified period, depending on the policy.
19. Which statement best describes a deductible in a health insurance plan?
A deductible is the amount the insured must pay for covered services before benefits begin. It does not include premiums, and after it is met, coinsurance or copays may apply.
20. If a long-term care contract is not a 'qualified' LTC contract under IRC 7702B, how are the benefits generally taxed?
Non-qualified LTC benefits are generally taxed as ordinary income to the extent they exceed the premiums paid (the investment in the contract).
21. What is the purpose of subrogation in disability policies?
Subrogation gives the insurer the right to pursue recovery from a third party responsible for the disability.
22. In individual health insurance planning, risk management strategies include
Effective risk management combines retention (self-insuring small losses), transfer (insurance), and reduction (mitigating likelihood or impact of losses).
23. If a policy pays per day, it can also be written to pay per admission. This means:
Some hospital indemnity policies offer either a per-day or per-admission benefit structure, depending on the policy.