Massachusetts Health & Accident Insurance Practice Exam

What does a Corridor Deductible refer to?

1. The maximum limit of covered expenses

2. The gap between a basic and major medical policy

3. An upfront payment required before benefits start

4. A type of health savings account

The correct answer is: The gap between a basic and major medical policy

A Corridor Deductible specifically refers to the gap between a basic medical policy and a major medical policy. When an insured person has a basic health insurance plan that covers a limited amount, the corridor deductible comes into play when the insured's medical costs exceed what the basic plan covers but have not yet reached the limit of the major medical insurance. In essence, the corridor deductible is an additional deductible that must be satisfied before the major medical policy begins to pay benefits for the costs incurred after the basic policy's coverage. This means that once an individual exhausts the benefits of the basic plan, they still need to pay the corridor deductible before the major medical coverage begins to cover further medical expenses. This concept is important in understanding how different insurance policies work together to provide comprehensive coverage. The options related to maximum limits, upfront payments, or health savings accounts do not accurately reflect the specific function of a Corridor Deductible in the context of insurance policy structures.