Question 75

Benefits are provided on a capitation basis

A major medical expense policy typically does not provide benefits on a capitation basis, which means that it does not pay a fixed amount per patient regardless of the services rendered. Instead, these policies are designed to cover a wide range of medical expenses with various cost-sharing methods.

A) The policy usually has a deductible and a high maximum benefit

This statement is true as major medical expense policies are characterized by having a deductible that the insured must pay before benefits kick in, along with a high maximum benefit limit to protect against catastrophic health expenses.

B) The policy usually contains a coinsurance provision

This is also true; major medical policies typically include a coinsurance provision, which requires the insured to pay a certain percentage of the costs after the deductible is met, further sharing the financial risk between the insurer and the insured.

C) Coverage is provided for both inpatient and outpatient hospital expenses

This statement is accurate as well. Major medical expense policies generally provide coverage for a range of medical services, including both inpatient and outpatient hospital expenses, ensuring comprehensive care.

D) Benefits are provided on a capitation basis

This statement is incorrect. Major medical expense policies do not operate on a capitation basis; rather, they reimburse for actual medical expenses incurred, subject to deductibles, coinsurance, and maximum benefits.

Conclusion

The correct answer is D because major medical expense policies do not provide benefits on a capitation basis, unlike some other health care payment models. Options A, B, and C accurately describe features of major medical expense policies, highlighting their structure and coverage, which makes D the only false statement among the choices.