Health Insurance Mastery Practice Exam

Which private insurance carrier has a contractual relationship with doctors and hospitals?

1. Medicaid

2. Blue Cross Blue Shield

3. Medicare

4. Private insurers

The correct answer is: Medicare

The choice indicating Medicare as the private insurance carrier with a contractual relationship with doctors and hospitals is inaccurate. Instead, private insurance carriers, such as Blue Cross Blue Shield or other private insurers, commonly establish contractual relationships with healthcare providers. These relationships often involve negotiated rates for services and provide a network through which members can receive care. Medicare, on the other hand, is a federally funded program primarily aimed at providing health coverage to individuals aged 65 and older and certain younger individuals with disabilities. While Medicare does have agreements with healthcare providers to accept its payment rates, it does not function as a private insurance carrier. Instead, Medicare pays providers directly rather than having a formal contractual arrangement similar to what private insurers typically establish. The correct classification of Blue Cross Blue Shield or similar insurers would indicate their role as private insurers that have structured agreements with a network of doctors and hospitals to manage care and set payment rates, thus ensuring a cohesive service delivery for their members.