Chapter 7: Health Insurance Underwriting Quiz

The term "premium mode" refers to the frequency at which the premium payment is made. It determines how often the policyholder needs to make payments towards their insurance premium. Different premium modes can include monthly, quarterly, semi-annually, or annually. The premium mode chosen by the policyholder depends on their financial situation and preferences.

According to HIPAA, a 10% excise tax on an early withdrawal from an IRA can be waived if the withdrawal is used for medical expenses that exceed 7.5% of the individual's adjusted gross income. This means that if the individual's medical expenses are equal to or greater than 7.5% of their adjusted gross income, they will not have to pay the 10% excise tax on the withdrawal.

Long Term Care insurance premiums are considered a tax deductible medical expense under the given rule because they are payments made for insurance coverage that provides for the cost of long-term care services, such as nursing home care, home health care, or assisted living facilities. These premiums can be deducted if they exceed 7.5% of the taxpayer's adjusted gross income, as allowed by the IRS.

Concurrent review is the process in which the insurer oversees the insured's hospital stay to ensure that everything is going according to schedule and that the insured will be released as planned. This involves monitoring the progress of the insured's treatment, reviewing medical records, and coordinating with healthcare providers to ensure appropriate and timely care.

The correct answer is that the contract is not in force without the initial premium being paid. This means that until the insured pays the initial premium, the health policy is not active and the insurer is not obligated to provide coverage or honor any claims. The initial premium is a necessary requirement to activate the contract and ensure that both parties are bound by the terms and conditions of the policy.

When assessing risk for Disability coverage, the number of children is not taken into consideration. The other characteristics listed, such as the health, gender, and occupation of the applicant, are factors that are typically considered when determining the level of risk for disability coverage. The number of children does not directly impact the likelihood of a disability occurring, and therefore is not relevant in assessing risk for this type of coverage.

Concurrent review is the process in which the insurer oversees the insured's hospital stay to ensure that everything is going according to schedule and that the insured will be released as planned. This involves monitoring the progress of the insured's treatment and evaluating the medical necessity of the services being provided. It helps to ensure that the insured receives appropriate and timely care while also managing costs for the insurer.

When an insurance policy is backdated, it means that the policy's effective date is set to a date earlier than the present. This can have several implications. It may allow the policyholder to have coverage for a specific incident or event that occurred before the policy was officially in effect. It can also affect the premium payments and the length of the policy term. Backdating a policy is typically done to provide coverage for a specific situation that occurred in the past, but it is important for insurance companies to carefully evaluate and approve such requests to prevent misuse or fraud.

Pre-certification refers to the process of obtaining approval from an insurance company before receiving medical treatment. It is done to ensure that the treatment is necessary and covered by the insurance plan. Concurrent review, on the other hand, occurs during the course of treatment to assess its ongoing necessity and appropriateness. Therefore, the correct answer is that pre-certification occurs before the treatment is provided.

The insurer is liable for the loss because the insured was injured as an innocent bystander during the commission of a felony. The insurer has a responsibility to cover the insured's losses and provide compensation for the injuries sustained.

The gatekeeper's role when used by an HMO is obtaining referrals to specialists from primary care physicians. This means that the gatekeeper acts as a mediator between the patient and the specialist, ensuring that the patient receives appropriate and necessary care. The gatekeeper reviews the patient's medical history and determines if a referral to a specialist is required. This helps in managing healthcare costs and ensuring that the patient receives the right level of care.

The term "premium mode" refers to the frequency at which the premium payment is made. It indicates how often the policyholder is required to make payments towards their insurance premium. This can vary depending on the insurance policy and the preferences of the policyholder. For example, premium mode options may include monthly, quarterly, semi-annual, or annual payments. The chosen premium mode can affect the total cost of the insurance policy, as well as the convenience and budgeting of the policyholder.

Utilization review involves assessing the appropriateness and efficiency of healthcare services. Monitoring the length of hospital stay, monitoring the appropriateness of care, and setting a hospital release date for a patient are all examples of utilization review as they involve evaluating and managing healthcare resources. However, ongoing inspection of accident-prone individuals is not directly related to the utilization of healthcare services and therefore does not fall under the category of utilization review.

An internist is an example of a primary care physician because they specialize in providing comprehensive medical care for adults. They are trained to diagnose and treat a wide range of illnesses and conditions, and they often serve as the first point of contact for patients seeking medical care. Internists focus on promoting overall health and wellness, managing chronic conditions, and coordinating care with other specialists when needed. They play a crucial role in preventive care, routine check-ups, and managing common health concerns, making them an essential part of primary care.

The requirement for any change in an insurance application is that it must be initiated by the applicant. This means that the applicant is responsible for requesting and making any changes to the application. The applicant must take the initiative to communicate their desired changes to the insurer, whether it is updating personal information, adjusting coverage, or making any other modifications to the application.

The insurer's underwriters would likely use experience rating to determine the appropriate coverage and final premium rate for XYZ Company's group health insurance. Experience rating involves analyzing the claims history and health risks of the group's employees. This information helps the underwriters assess the likelihood of future claims and calculate a premium rate that reflects the group's risk profile. Credit reports and arrest reports are unlikely to be relevant in this context, while the AM Best rating pertains to the financial stability of the insurer itself and may not directly impact the determination of coverage and premium rate for the group.

A major medical indemnity plan typically does not provide a form of managed care. Managed care refers to a healthcare system that aims to control healthcare costs and improve quality by coordinating and managing healthcare services. In contrast, a major medical indemnity plan is a type of insurance plan that provides coverage for major medical expenses, such as hospital stays or surgeries, but does not typically involve managed care features like network providers or pre-authorization requirements. Instead, it allows the insured to choose their healthcare providers and does not require referrals or coordination of care.

Long Term Care insurance premiums are considered a tax deductible medical expense under the given rule because they cover the cost of necessary medical services, including nursing home care, home health care, and assisted living services. These premiums can be deducted if they exceed 7.5% of the taxpayer's adjusted gross income, providing a tax benefit for individuals who require long-term care.

Upon delivering a specified disease insurance policy to a new policyowner, Tara the producer is expected to collect the initial premium, signed impairment rider acknowledgment, and a good health statement. However, she is not expected to collect a modified application with a new signature. This suggests that the policyowner does not need to modify their application or provide a new signature at the time of delivery.

The appropriate tax consequence in this scenario is that the benefits from the key employee disability policy are fully taxable. This means that when the employee receives the benefits, they will be subject to income tax. The fact that the premiums are paid by the company with tax deductible dollars does not affect the taxability of the benefits.

Premiums paid by the insured for personally owned disability income insurance are not tax deductible. This means that the insured cannot claim these premiums as a deduction on their tax return. Unlike certain other types of insurance, such as health insurance or certain business-related insurances, disability income insurance premiums are not considered a qualified expense for tax purposes. Therefore, the insured must pay the premiums with after-tax dollars and cannot receive any tax benefits for these payments.