Massachusetts Health & Accident Insurance Practice Exam

What type of insurance is known as "first dollar insurance"?

1. Basic Medical Expense Insurance

2. Hospital Expense Policies

3. Elective Indemnity

4. Nondisabling Injury Coverage

The correct answer is: Basic Medical Expense Insurance

First dollar insurance refers to a type of coverage that provides benefits without requiring the insured to meet a deductible. Basic Medical Expense Insurance is recognized for this characteristic, as it typically pays for eligible medical expenses from the outset, meaning that covered individuals can receive care without being responsible for an initial out-of-pocket expense. This type of insurance is valuable for ensuring that individuals have access to necessary medical services without the financial burden that can arise from deductibles. The focus of basic medical expense insurance is primarily on lower-cost medical visits, minor surgeries, and certain preventive services, which may otherwise be difficult for individuals to afford upfront. In contrast, hospital expense policies may require individuals to pay a portion of costs or have higher deductibles before benefits kick in, making them less aligned with the concept of "first dollar insurance." Elective indemnity and nondisabling injury coverage also do not fit this description, as they often involve specific conditions or limitations that do not guarantee immediate payment for incurred expenses.