Health Insurance Mastery Practice Exam

What type of medical insurance policy typically covers hospital stays?

1. Long-term care insurance

2. Health Maintenance Organization (HMO)

3. Short-term medical expense policy

4. Term life insurance

The correct answer is: Short-term medical expense policy

The type of medical insurance policy that typically covers hospital stays is commonly represented by the Health Maintenance Organization (HMO). HMOs are designed to provide a wide range of healthcare services, including hospitalization, as part of their coverage. They often require members to choose a primary care physician and obtain referrals for specialist services, ensuring that all necessary medical services, including inpatient care, are covered under the policy holders’ membership. In contrast, long-term care insurance is specifically intended to cover services needed for chronic illnesses or disabilities that limit a person's ability to perform basic daily activities, rather than hospital stays for acute medical conditions. Short-term medical expense policies may cover hospital stays, but they are primarily designed to provide temporary coverage for medical expenses for a limited duration, often during transitional periods. Lastly, term life insurance provides a death benefit to the beneficiaries upon the policyholder's death and does not cover medical expenses or hospital stays at all. Thus, while short-term medical expense policies can cover certain medical costs, HMOs are typically more comprehensive in covering hospital stays as part of their healthcare network services.