Hospitalization Insurance and Health Maintenance Organizations, Exams of Nursing

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TEXAS LIFE HEALTH INSURANCE Actual Exam 2024- 2025

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All of the following are methods of determining the extra rate for a substandard class or risk EXCEPT a.) variable additional premium b.) tabular rating c.) rated-up age d.) flat additional premium - ANSWER>> A Medical expense insurance is commonly referred to as - ANSWER>> Hospitalization insurance A form of group insurance that may include students, campers, passengers of a common carrier, volunteer groups, and sports teams is known as - ANSWER>> Blanket insurance In a limited policy, to ensure that the insured has sufficient notice that the coverage is limited, every policy that provides limited coverage must, by law, state plainly on the first page of the policy, - ANSWER>> "THIS IS A LIMITED POLICY" Which of the following cares for patients who do not require acute hospital nursing care but who need impatient supervision by a registered nurse? a.) managed care

b.) skilled nursing facilities c.) home health care d.) urgent care - ANSWER>> B Which of the following allows an employer to combine a high- deductible health plan with a spending or reimbursement account? a.) health reimbursement accounts (HRA) b.) multiple employer trusts (MET) c.) health savings account (HSA) d.) consumer-driven health plans (CDHP) - ANSWER>> D An arrangement that allows very small groups to have some of the benefits of group insurance, especially at a lower cost, is called - ANSWER>> Franchise insurance All of the following statements about franchise insurance are true EXCEPT a.) there is a master policy b.) plans may be contributory c.) one premium is paid for the entire group d.) plans may be noncontributory - ANSWER>> A Social security pays all of the following except a.) workers comp b.) retirement benefits to workers

c.) medicare benefits d.) disability income benefits to workers - ANSWER>> A All of the following are examples of managed care plans EXCEPT a.) health maintenance organizations b.) point-of-service plans c.) indemnity arrangements d.) preferred provider organizations - ANSWER>> C A method of payment in which a provider is paid a specific fee monthly for each subscriber is known as - ANSWER>> Capitation Best cleaners has a high-deductible health plan (HDHP). What account may the employees also have to pay for qualified medical expenses throughout the year on a tax-free basis? - ANSWER>> A health savings account Julia has a policy that will pay any expenses that she incurs due to in-hospital medical treatment, as well as some of the expenses she incurs on an outpatient basis. Julia probably has a

• ANSWER>> medical expense insurance policy George has a policy that will provide him an income if he is disabled from illness or injury and recuperating at home. George probably has a - ANSWER>> Disability income policy

The Hoosier HMO contracts with an independent medical group that specializes in a variety of medical services to provide those services to HMO subscribers. The Hoosier HMO is structured - ANSWER>> group model HMO Ally pays for her health insurance monthly. Her identical twin Georgia has the same policy, but pays annually. Which of them probably pays more for the policy? - ANSWER>> Ally probably pays more Health insurance coverage never applies until - ANSWER>> the insured has paid for the policy No loss/no gain legislation requires a replacing policy to - ANSWER>> continue to pay claims ongoing under the policy it replaces A statement that ensures benefits provided under the old policy will continue under the new policy is - ANSWER>> A transfer of benefits statement Kim's policy is issued with wording that decreases the benefits payable for a given condition. That wording is known as - ANSWER>> A reduction An optionally renewable policy is - ANSWER>> Cancelable by the insurer only at the end of the policy term

In addition to premium, the consideration for a policy includes - ANSWER>> the statements made in the application Penny hasn't paid her annual premium of $400, but her policy is still in the grace period. She has an accident and files a claim to be reimbursed for $1,500 in medical expenses. She will receive

• ANSWER>> $1, Darryl is a salesman. Last year was a bad year for him, and he earned only $1,000 a month. This year he was back on track and earned $3,000 a month. He has just become disabled. Under the average earnings clause, his monthly benefit will be - ANSWER>> $3, All of the following are required health insurance provisions EXCEPT a.) grace period b.) cancellation c.) proof of loss d.) time of payment of claims - ANSWER>> B It has been 1 day short of a year since Jerry provided his insurer with proof of loss. He decides he's not satisfied with the settlement offer he has received. How much longer does he have to file a suit against the insurer? - ANSWER>> 1 day and 2 years

Sharon is anxious to know if her claim has been accepted. She hasn't heard back from the insurer for 29 days since she filed her claim. How much longer must she wait before suing the insurer becomes an option? - ANSWER>> 31 days Javier applies for policy reinstatement on June 1. If he doesn't hear back from the company, on what date can he assume his reinstatement application has been accepted? - ANSWER>> July 15 A shorter grace period results from - ANSWER>> A more frequent premium mode Gita paid an annual premium of $200 and 6 months later, her policy was cancelled and she received a pro rata refund. The amount Gita received is - ANSWER>> $ Su has a loss on January 1. By what date must proof of loss be filed for a claim? - ANSWER>> March 31 Which of the following is NOT part of the contract, according to the entire contract provision? a.) policy document b.) statements made by agent c.) endorsements d.) attachments - ANSWER>> B

Faed buys a health insurance policy in 2015. If he lives in a typical state, in what year will it become incontestable? - ANSWER>> 2017 The insured will receive an insurer approved copy of any change in the policy as notification of the policy change. This copy must be - ANSWER>> Attached to the policy, making it part of the entire contract Which of the following may be used by the insurer to deny a claim after two years from the date of issue of the policy? a.) any response on application questionnaire that is incorrect or misleading regarding health of the insured b.) misstatements by the insured on application questionnaire c.) fraudulent misstatements d.) material misstatements made by the insured on application

• ANSWER>> C Joe has a claim under his health policy three months after the policy was issued. Which of the following statements is CORRECT? a.) company may void the contract or deny claim for fraudulent misstatements only b.) company may void contract or deny claim for any misstatement on application c.) company does not have to prove fraudulent misstatement

d.) insurer would have to sue the insured in court in order to deny a claim or void policy - ANSWER>> B Sandra's health insurance policy has lapsed and the grace period expired. She mailed a payment to the agent. Which of the following is CORRECT? a.) company must accept payment and reinstate policy b.) upon acceptance of payment by agent or insurer, the policy is reinstated c.) reinstatement will provide coverage for any illness or accident without a waiting period d.) the policy is reinstated provided Sandra has a receipt of Mailing with the date of mailing clearly affixed - ANSWER>> B Mr. parks is seriously injured in an auto accident. He is in intensive care and heavily sedated for over a month. He has no family or friends that have been notified. When is Mr. parks required to provide notice of claim to the insurance company? - ANSWER>> As soon as reasonably possible Upon notice by the insured of claim, the insurer is to provide claim submission forms within - ANSWER>> 15 days Mrs. Jones is the insured applying for a life insurance policy purchased by her two children. Her two children want to pay the premium, but want to be the beneficiaries named in the policy. In order to best protect the children, they should be shown as or named - ANSWER>> Irrevocable beneficiaries

The Legal Action Against Us provision of the policy required that lawsuits against the insurer cannot be instituted - ANSWER>> Prior to 60 days after a written proof of loss, nor after three years following the proof of loss Jerry applies for a policy and states that he is 21 years of age rather than the 23 years actual age. In this case, the claim amount would be - ANSWER>> Lower than the face amount of the policy A disability income policy is purchased by Bill Merchant, who is employed as a sales rep. Later, Mr. Merchant gets a pilot license and begins a crop dusting business. If he does not notify the insurer of the change in occupation, any benefit he received would - ANSWER>> Be reduced to the benefit amount that would have been purchased by the established premium Which of the following terms does NOT apply to various case management provisions of health insurance policies? a.) usual and customary fee b.) utilization review c.) second surgical opinion d.) precertification review - ANSWER>> A The free-look period in most policies is - ANSWER>> Usually 10 days, but may be 15 or 20 days in some states

Normally, written proofs of loss must be furnished within how many days after the loss? - ANSWER>> 90 When Betty purchased her insurance policy, her age was recorded as 32 when she was actually 34. Assuming her policy includes the misstatement of age provision and the insurance company discovers this 4 years later, Betty's policy - ANSWER>> limits will be lowered If a policy includes the provision on conformity with state statutes, and the state changes the law to be in conflict with another provision of the policy - ANSWER>> the provision will automatically be amended to conform to the minimum requirement of the statutes Mike allows his policy to lapse, then applies for reinstatement using the company's required application. The company does not inform Mike either that the policy has been accepted or that the policy is being rejected. At what point can Mike consider the policy reinstated? - ANSWER>> After 45 days Because the insurer needs time to respond to a claim, the law provides the insurer a window during which the insured cannot sue to recover under a claim. This window lasts for - ANSWER>> 60 days A revocable beneficiary - ANSWER>> may be changed without the beneficiary's consent

Joe took out a disability policy while working as a very successful stockbroker. A few years later, he decides to take a less stressful job at a not-for-profit organization, writing about financial issues. He loves his new job and doesn't mind the fact that he makes a lot less money. When he becomes disabled 3 years later, his disability benefit is more than he has made in salary in 3 years. If the policy contains an average earnings clause, Joe's benefit will A) be the greater of Joe's monthly earnings at the time the disability started, or the average monthly earnings for the period of 2 years immediately preceding his disability B) be the same as listed in the policy C) be the greater of Joe's monthly earnings at the time the disability started, or the average monthly earnings for the period of 2 years immediately preceding his disability. In addition, the insurer will return some of the excess premiums that paid - ANSWER>> C Carmen gets her health insurance policy on May 1, and on May 3 she decides she doesn't want it and returns it to the company. On May 6, she is hit by a car. The company A) will pay any resulting claim minus the amount of the returned premium B) will pay any resulting claim only if the premium has not yet been returned to Carmen C) will pay any resulting claim because she was injured within the 10-day free-look period

D) will only return any premium Carmen has paid and not any resulting claim - ANSWER>> D) will only return any premium Carmen has paid and not any resulting claim Jennifer takes out an optionally renewable health policy with an annual premium due on June 14. The insurer decides it no longer wants to insure people with first names longer than five letters. The insurer may - ANSWER>> cancel the policy, but only on June 14 of the next year To receive benefits from a disability income policy due to sickness, the insured must be - ANSWER>> Totally disabled Which disability income rider is designed to fill gaps of coverage under workers comp or state disability benefits are denied? - ANSWER>> Social insurance supplement rider The benefit that protects against the erosion of purchasing power for fixed disability benefits is known as - ANSWER>> Cost of living benefit The benefit that pays the regular total disability benefit during the elimination period when the insured is hospitalized is known as - ANSWER>> Hospital confinement rider The option that allows an insured to purchase additional amounts of disability income protection is known as - ANSWER>> future increase option

Which definition of total disability is more favorable to the insured? Any occupation or Own occupation? - ANSWER>> Own occupation Occupational disability benefits are often reduced by benefits received - ANSWER>> from either Social Security or workers' compensation Which of the following is generally NOT considered to be a presumptive disability? a.) total and permanent blindness b.) loss of the dominant hand c.) loss of use of any two limbs d.) loss of speech and hearing - ANSWER>> B Which of the following statements about partial disability is NOT true? a.) sickness disability is more likely to be partial than accident disability b.) an insured might receive both total and partial disability benefits as the result of a single accident c.) the person is able to perform one or more important duties of the occupation d.) the person is not able to perform every duty of the prior occupation - ANSWER>> A

some policies have replaced the partial disability provision with

• ANSWER>> a residual disability provision Which of following statements about AD&D coverage is NOT true? a.) a sched listing dismemberments and the sums that will be paid for them will be listed in policy b.) if insured is not disabled after an accident, if loss of limb or sight occurs within 90 days, sums in the sched will be paid c.) sums payable are generally expressed as percentages of death benefit limit or capital sum d.) if policy has a disability income feature, disability income payments cont. after dismemberment sum paid - ANSWER>> D Which of the following organizations would be most likely to be eligible for business overhead expense? a.) law firm with 15 partners b.) major multinational corporation c.) doctors office d.) public library - ANSWER>> C To protect the businessowner, the elimination period for disability buy-sell insurance normally is - ANSWER>> 1 to 2 years

Lauren's policy covers hospital expenses by paying a specified, predetermined amount per day, as shown in a schedule in the policy. Laurens policy pays on - ANSWER>> An indemnity basis Carmen falls and breaks her leg, incurring $2,000 in medical expenses. Her policy pays the entire amount. Carmen has a A) policy with first dollar coverage B) surgical expense policy C) hospital expense policy D) medical expense policy - ANSWER>> A) policy with first dollar coverage A policy with first dollar coverage begins to pay when medical expenses are incurred, without a deductible. Maternity benefits must be provided on the same basis as nonmaternity benefits - ANSWER>> if the policy covers an employee group of 15 or more people No loss/ no gain laws require - ANSWER>> Replacing health insurance policies to cover any conditions for which there are ongoing claims under existing coverage. Which of the following would most likely be covered under a medical expense policy? a.) Carmelita decides to get a flu shot this year b.) Gary goes to the doctor each year for an annual check-up

c.) Earl requires some help getting dressed in the morning d.) Gertrude steps on a rusty nail and requires a tetanus shot - ANSWER>> D All of the following statements about comprehensive dental policies are true EXCEPT a.) with a comprehensive dental plan, there is a specified dollar amount paid per year b.) comprehensive dental plans provide routine dental care services without deductibles or coinsurance c.) with a comprehensive dental plan, there is a specified dollar amount paid per family member covered d.) comprehensive dental plans provide routine dental care services after the insured pays deductibles - ANSWER>> D All of the following statements regarding dread disease policies are true EXCEPT a.) polices are often expensive in comparison to full health cover due to the expense of the disease to treat b.) policies are often inexpensive in comparison to full health coverage due to the low frequency of the disease covered c.) dread disease policies can cover heart disease or cancer d.) a dread disease policy is a limited policy, covering only a limited, specified risk - ANSWER>> A Hospital income insurance is also known as - ANSWER>> Indemnity insurance

All of the following statements about hospital income insurance are correct EXCEPT a.) the payout begins when the insured is confined to the hospital and ends on final day of hospitalization b.) policy pays indemnity directly to the insured c.) policy provides a flow of income to the insured d.) policy is intended to cover expenses for hospitalization - ANSWER>> D All of the following statements about prepaid dental plans are correct EXCEPT a.) services are offered based on fixed per-membership-per- month payments b.) prepaid dental plan must provide that any licensed dentist may participate as a provider c.) prepaid dental plans operate much like health maintenance orgs d.) only a select few licensed dentist may participate as providers - ANSWER>> D Copies of complaints and responses of any dentist in a prepaid dental plan must be kept for a period of - ANSWER>> Three years Scheduled benefits are generally - ANSWER>> lower than reasonable and customary allowances

Prepaid dental plans offer services based on - ANSWER>> Capitation Sin Lan has a hospital income policy that will pay $1,500 per month for up to 12 months. There is no elimination period. If Sin Lan is hospitalized for 10 days, how much will the policy pay? - ANSWER>> $ Which of the following drugs may be excluded from a prescription drug policy? a.) ginseng b.) rogaine c.) all of these d.) fertility drugs - ANSWER>> C A special type of policy tends to cover A)a broad number of situations as described in the policy itself B)a limited number of situations as described in the policy itself C)more areas than basic medical expense D)whatever the insured wants to be covered - ANSWER>> B Which of the following is NOT likely to be considered nonroutine dental care?

a.) microscopic analysis of tissue biopsy material for diagnosis of oral diseases b.) treatment of soft tissue substance located in the center of each tooth c.) repairing or restoring dental work that has been damaged in some way d.) annual checkups and cleaning of teeth, including x-rays to check the health of teeth - ANSWER>> D For nonroutine treatments, a comprehensive policy generally pays - ANSWER>> a percentage of the reasonable and customary charges after a deductible Which of the following is NOT a common way dental insurance programs work to minimize adverse selection? a.) graduating the coinsurance percentage to increase each plan year b.) basing the benefit on the least costly treatment option c.) increasing the max annual benefit to encourage the insured to maintain dental health for the long term d.) lowering the coinsurance percentage for optional expenses - ANSWER>> C What is the main difference between a prepaid dental plan and a comprehensive dental plan? - ANSWER>> Comprehensive dental plans pay on the basis of reasonable and customary

charges, whereas prepaid dental plans pay on a capitation basis. A prepaid dental plan that wants to restrict an enrollee's ability to receive services from a class of providers - ANSWER>> Must describe the limitations in the evidence of coverage and in all solicitation documents Hospital indemnity insurance pays - ANSWER>> an income for each day the insured is confined to the hospital Vision care insurance is generally needed to cover all of the following EXCEPT A)eye examinations B)costs of contact lenses C)costs of prescription lenses D)injury to the eye - ANSWER>> D. Injury to the eye Credit health insurance covers - ANSWER>> debtor For nonroutine treatments, a comprehensive policy generally pays - ANSWER>> a percentage of the reasonable and customary charges after a deductible

An employer that has fewer than 20 employees - ANSWER>> Is not subject to the Consolidated Omnibus Budget Reconciliation Act (COBRA) Richard encourages his father to move home. His father agrees, but insists on paying rent and something towards utilities and food. His father is 62 years old and continues to file a tax return. Which of the following is most likely? a.) Richard's father is covered by Medicare since he is collecting social security retirement benefits b.) Richard's father is not a dependent and thus not eligible for coverage under Richard's group health insurance plan - ANSWER>> B When working couples are both covered under each one's group health insurance plan, which statement is NOT correct regarding coverage for dependent children? a.) birth day and month of parents are often used to determine which plan is primary b.) if parents are separated or divorced, plan for the parent with custody is primary, barring any legal arrangements c.) plan of parent that has first birthday of year is primary d.) the fathers policy will always pay first, or be primary coverage - ANSWER>> D When an individual is insured under two group health insurance plans, such as when both husband and wife are each

covered under each ones group health insurance - ANSWER>> Each one's own employers policy would as if there is no other policy In general, premiums for group insurance are based upon which type of rating? - ANSWER>> Experience rating The Americans with disabilities act is applicable to employers with how many employees? - ANSWER>> 15 or more The age discrimination in employment act applies to employers with how many employees and is directed to employees of what age? - ANSWER>> 20 or more employees and age 40 or older Which of the following legislation amended the social security act to make Medicare insurance secondary to group health insurance plans when a person is covered by both? a.) Consolidated Omnibus Budget Reconciliation b.) Tax Equity and Fiscal Responsibility Act (TEFRA) c.) Employee Retirement and Income Security Act (ERISA) d.) Health Insurance Portability and Accountability Act (HIPPA) - ANSWER>> B Under the coordination of benefits rule, the primary company pays - ANSWER>> as if there were no other coverage

Under the coordination of benefits rule, the secondary company pays - ANSWER>> whatever the other coverage does not pay, up to the policy limits Which federal law requires employers with more than 20 employees to include in their group insurance plan a contribution of benefits provision for all eligible employees? - ANSWER>> COBRA Which federal law is intended to prevent group term life plans from discriminating in favor of key employees? - ANSWER>> TEFRA Which federal law extends the minimum continuation of coverage period from 18 to 29 months for qualified beneficiaries disabled at the time of termination or reduction in hours? - ANSWER>> OBRA Which federal law is intended to accomplish pension equity but also protects group insurance plan participants? - ANSWER>> ERISA Which of the following is a disqualifying event under COBRA? a.) employee is no longer eligible for group health plan because of change in covered classes b.) employer ceases to maintain any group health plan c.) employee voluntarily leaves employment with employer

d.) employees employment is terminated by the employer - ANSWER>> B Under OBRA, an employer may terminate COBRA coverage because of coverage under another health plan A) as long as the other health plan limits benefits for the insured's preexisting conditions B) as soon as the coverage is in force C) as long as the other health plan does not limit benefits for the insured's preexisting conditions D) only if the premiums for the new plan are paid entirely by the insured's new employer - ANSWER>> C. as long as the other health plan does not limit benefits for the insured's preexisting conditions Which of the following individuals is least likely to be eligible for Medicare? a.) Genevieve, who has been receiving disability benefits from social security for 3 years b.) Mannie, who is 65 and just registered for his social security benefits c.) Karl, who has been diagnosed with end-stage liver disease d.) Margaret, who is not eligible for social security, but is willing to pay a fee for her insurance - ANSWER>> C

Under Medicare part B, individuals pay a deductible each - ANSWER>> year After the deductible is satisfied, part B pays what percentage of all approved charges? - ANSWER>> 80% Doctors and suppliers who agree to accept the amount Medicare will pay are said to have agreed to A) assessment B) payment C) capitation D) assignment - ANSWER>> D. Assignment Some kind of supplement to Medicare is needed by almost everyone covered by Medicare. Which of the following individuals would NOT need Medicare supplement insurance? A) Carl, whose net worth is high enough to cover any medical bills that might incur B) Ken, whose income is low enough to qualify him for help from Medicaid