Understanding Health Insurance Basics

What is the primary purpose of health insurance?

• To provide life coverage

• To cover medical expenses

• To insure property

• To offer travel protection

Which of the following is a type of health insurance plan?

• Homeowners insurance

• Auto insurance

• Health Maintenance Organization (HMO)

• Life insurance

What is a premium in the context of health insurance?

• The amount paid for a doctor's visit

• The monthly fee paid to maintain health insurance coverage

• The cost of a prescription medication

• The fee for a gym membership

Which of the following best describes a deductible in health insurance?

• A fixed amount paid for each medical service

• The total cost of an insurance policy

• The amount you pay out-of-pocket before insurance covers expenses

• The monthly payment for insurance coverage

Identify a characteristic of a Preferred Provider Organization (PPO) plan.

• Requires referrals for specialists

• Offers a network of preferred doctors and hospitals

• Does not cover out-of-network care

• Has no monthly premiums

What is the main difference between an HMO and a PPO?

• HMOs have higher premiums than PPOs

• PPOs require referrals for specialists, while HMOs do not

• HMOs require you to choose a primary care physician, while PPOs do not

• PPOs do not cover preventive care, while HMOs do

Which of the following is true about health insurance premiums?

• They are paid only when you visit a doctor

• They are paid annually in a lump sum

• They are paid regularly, often monthly, to keep the insurance active

• They are optional and can be skipped without losing coverage

What happens when you reach your deductible in a health insurance plan?

• You start paying higher premiums

• Your insurance begins to cover a larger portion of your medical expenses

• You lose your insurance coverage

• You receive a refund of your premiums