Medicare Case

Health Insurance, Medicare, and Medicaid: Questions with Rationales

1. Which part of Medicare covers the cost of prescription drugs?

A. Part A

B. Part B

C. Part D

D. Medicare does not cover the cost of any prescription drugs.

Effective January 1, 2006, Medicare Part D partially covers the cost of prescription drugs for seniors.

2. Managed care plans grew out of which basic belief?

A. The use of a gatekeeper could minimize health costs.

B. Preventive care was less expensive than treating a serious illness.

C. Capitation was a less expensive way to provide basic health care.

D. Limiting the number of health care providers to individuals provided economies of scale.

Managed care developed from a belief that preventive care costs less to treat than waiting for a serious illness. The other answer choices are correct statements about managed care in some circumstances, but were not the belief upon which managed care was developed.

3. Which of the following statements regarding long-term care and Medicare is(are) CORRECT?

I. Medicare is one of the best ways to pay for long-term care because benefits may be used for up to 5 years.

II. Medicaid planning (i.e., spending down assets to qualify for Medicaid) is an important tool that planners should use in helping their clients pursue long-term care financial goals.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

Medicare is not a good option to pay for long-term care because it is limited, restrictive, and will only pay for skilled nursing facility care for up to 100 days per benefit period. In addition, current law makes it a misdemeanor for planners to assist clients with spend-down planning to qualify for Medicaid.

4. Mrs. Hopkins has a major medical insurance policy with a $500 deductible and an 80% coinsurance clause. She becomes ill and is admitted to the hospital for several...