American Academy of Professional Coders (AAPC) Practice Exam

Which of the following statements is true about private insurance plans?

1. They are government mandated with no variations

2. They cover only catastrophic health issues

3. They can include both basic and major medical coverage

4. They eliminate the need for supplemental insurance

The correct answer is: They can include both basic and major medical coverage

Private insurance plans are designed to offer a range of coverage options tailored to meet the needs of individuals and families. The statement that they can include both basic and major medical coverage accurately reflects the flexibility and variety available in private insurance. Basic coverage typically encompasses essential health services, while major medical coverage is aimed at more extensive healthcare needs, such as surgeries or long-term hospital stays. The nature of private insurance allows for different plan structures, giving consumers the ability to choose plans that align with their financial situations and healthcare needs. As a result, policyholders often have the option to select plans that provide comprehensive care, which can encompass preventive services, emergency care, hospitalization, and specialty services. In contrast, the other statements do not hold true in the context of private insurance. For example, they are not government mandated with uniformity, which allows for differences between providers. Furthermore, while some plans may focus on catastrophic coverage, many are designed to cover a broader spectrum of health issues. Lastly, while some private plans may be comprehensive enough to reduce the need for supplemental insurance, they do not universally eliminate the necessity for it, as individuals may still seek additional coverage based on their unique healthcare needs.