Test Content

Question 1

2 Points

Health Maintenance Organizations differ from commercial insurers in that they

are not subject to regulation.

operate in the same manner as Blue Cross Organizations.

are owned by the participating subscribers.

also provide health care.

Question 2

2 Points

The capitation approach to charging for health care benefits is characteristic of

Blue Cross and Blue Shield organizations.

preferred provider organizations.

point of service plans.

health maintenance organization.

Question 3

2 Points

A disability income insurance policy on which premiums are paid weekly must have a grace period of at least

seven days.

ten days.

thirty-one days.

there is no grace period on weekly premium policies.

Question 4

3 Points

When home care benefits are included in a long-term care insurance policy

home care benefits are usually subject to a requirement that the insured was previously confined in a skilled nursing facility.

home care benefits are provided only if the insured has been hospitalized.

coverage applies only to home care workers certified by Medicare.

coverage may also include personal care services like bathing, dressing, and grooming.

Question 5

2 Points

The change of occupation provision used in individual health insurance contracts

is one of the mandatory uniform provisions.

forbids the changing of occupations.

forbids the changing of occupations.

provides for a return of premium if a new occupation is less hazardous and an adjustment of benefits if it is more hazardous.

Question 6

3 Points

Benefits paid under tax-qualified long-term care insurance

are exempt from federal income tax.

are taxable as income, but deductible as medical expenses.

are taxable as income unless paid by as part of an employee benefit plan.

are excludable from taxable income up to a specified daily limit or up to the costs actually incurred for long-term care.

Question 7

3 Points

Which of the following is true with respect to Medicare Prescription Drug Coverage?

It may be offered as part of a Medicare Advantage Plan or through a stand-alone Prescription Drug Plan.

It is offered as part of a Medicare Advantage Plan only.

It offered only as a stand-alone Prescription Drug Plan.

It brought uniformity to Medicare prescription drug coverage plans and coverage.

Question 8

2 Points

From the perspective of the subscriber, a major disadvantage of health maintenance organizations is

the absence of coverage for outpatient services.

the inability to use providers outside the system except in emergencies.

the absence of a gatekeeper.

are not subject to regulation.

Question 9

3 Points

The Medicaid program

is a federal-state program that provides medical assistance to low-income individuals.

has uniform national eligibility requirements established by the federal government.

is completely funded by the federal government.

is completely funded by the state government.

Question 10

3 Points

A business valued at $600,000 has four partners. If each partner buys $50,000 of life insurance on each of the other partners, this arrangement is known as

an insurable interest plan.

a cross-purchase plan.

a shared interest plan.

an entity plan.

Question 11

2 Points

Disability income insurance

is less important than life insurance because the probability of death at most ages is greater.

is sold only on a group basis.

is often overlooked in income protection planning.

should be purchased with as short a waiting period as possible.

Question 12

3 Points

The part of Medicare that is designed to pay for hospital expenses, but excludes physician's charges is

Medicare Part A.

Medicare Part B.

Medicare Part C.

Medicare Part D.

Question 13

2 Points

Although Social Security provides benefits in the event of a worker's disability

coverage qualification requirements are demanding.

coverage is subject to a one-week waiting period.

coverage is provided for disabilities that are short-term only.

coverage decreases based on the number of work-related claims.

Question 14

3 Points

Which of the following is an option under Medicare Advantage?

Short-term care coverage

Long-term care coverage

Private free-for-service plans

Nonpreferred provider organizations

Question 15

2 Points

Under a health savings account

contributions by individuals are tax deductible up to a limit.

distributions to pay qualified medical expenses are taxable as income, but deductible as medical expenses to the extent that they exceed 7.5% of adjusted gross income.

investment income is taxable on an annual basis.

distributions for medical expenses are nontaxable to the extent they exceed contributions.

Question 16

3 Points

Which of the following is a characteristic of Medicare Supplement policies?

Policies cannot exclude preexisting conditions.

Policies may not impose a waiting period on preexisting conditions.

Policies cannot be guaranteed a renewal.

Coverage for Medicare cost-sharing features will not automatically change with Medicare deductibles and coinsurance.

Question 17

3 Points

Which of the following types of pension plans are employers required to insure with the Pension Benefit Guarantee Corporation?

Defined contribution plans

Defined benefit plans

Defined benefit and defined contribution plans

Single employer plans

Question 18

2 Points

A preferred provider organization

is a health insurer selected by a group of physicians.

is a group of health care providers designated by an employer or insurer.

is an insurer approved by the state commissioner of insurance.

usually charges higher fees than other providers in the area.

Question 19

3 Points

When a physician refuses to accept assignment under Medicare

he or she is barred from participating in Medicare for two years.

the beneficiary may have additional out-of-pocket expenses.

there is no limit on the amount the physician may charge a Medicare beneficiary.

neither the physician nor the beneficiary can collect from Medicare.

Question 20

2 Points

The elimination period in disability income contracts performs the same function as

a waiver of premium clause.

a deductible.

an incontestable clause.

a facility of payment clause.