Health Insurance Information Trivia Quiz

Answer: Health Maintenance Organization

When HMOs first started, many people were attracted to them because they covered routine check-ups and tests while the traditional insurance plans only covered "sick visits". However as HMOs developed further they have become less popular because they limit which doctors a patient may see and what treatments are covered. HMO management has been known to overrule doctors about whether a given treatment is "medically necessary".

Answer: Premium

Regular premiums are paid to create a pool of available funds which can then be used to pay the medical bills of the contributors. At least that's the concept behind health insurance. However, some of this money goes as profits to the insurance companies' management and shareholders, rather than being used for medical or administrative purposes.

The CEO of Blue Cross/Blue Shield of Maryland, Bill Jews, received over $2.77 million in salary and bonuses in 2002 (This was reported in the Baltimore Sun on July 8 2003). That would cover a lot of doctor's visits!

Answer: Deductible

Policies with higher deductibles usually are less expensive since the insurance doesn't kick in right away. This is true of other types of insurance (such as auto or homeowners) as well as health insurance.

Answer: Assigned claims are paid to the provider (usually a doctor or hospital). Unassigned claims are paid to the patient.

When the doctor's office asks you to sign a form allowing them to bill the insurance and get paid directly, they are asking you to assign your benefits to them. Providers within a network are called participating providers or in-network providers.

Answer: Coinsurance

These policies are known as indemnity policies, to distinguish them from HMO policies. They are also referred to by the percentages involved, e.g. an 80/20 plan (patient pays 20%).

Answer: Co-pay

The most common co-pay amounts are $10, $15 and $20 per visit. Visits to specialists under HMO plans do not involve co-pays as long as the primary physician refers the patient to the specialist.

Answer: Preferred Provider Organization

This is different from an HMO. HMOs require the patient to chose one doctor from the list and always go to that doctor first.

Answer: Co-ordination of benefits

Coordination of benefits was established so that a doctor or patient wouldn't be paid more than the total bill. There are very specific rules set up to determine which policy should pay first.

When I started working as a claims examiner, over fifteen years ago, the rule was that if a child was covered through insurance from both parents, the father's policy would pay first. Now the policy from the parent whose birthday falls earlier in the calendar year will usually pay first.

Answer: Medicare

Medicaid provides health insurance to poor people and children. Social Security provides a income, not health insurance. I made up "old age insurance".

Although government-run programs are often considered to be top-heavy and bureaucratic, the Medicare program spends approximately 2% of its outlays on administrative costs. In comparison, private insurance spends an average of 12% to 15% to administrate.

Answer: False

Some of these decisions are a matter of law. As insurance companies have tried to limit coverage in order to continue their profitability, many state legislatures have passed laws requiring that specific services be covered. For example, Maryland (where I live) mandates that insurance pay for at least two days in the hospital for women giving birth and their newborn babies. Coverage for mammograms for women and prostate exams for men are also mandated.

I hope you have enjoyed this quiz, and that if you live in the U.S. it has helped you to better understand the system.