HMOs

question 15

Multiple Choice

HMOs:

• A) are the same as PPOs but cover only groups of individuals
• B) collect a capitation payment for each insured and provide "comprehensive" health and preventive care
• C) tend to be found mostly in rural areas
• D) provide a reduced fee if the insured has zero claims during the preceding policy year

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Definitions:

Insurance Expense

It refers to the cost attributed to purchasing insurance policies for a business, which is typically considered an operational expense.

Insurance Policy

A legal contract between an insurer and the insured, where the insurer agrees to compensate the insured for specific losses in exchange for a premium.

Adjusting Entry

An accounting record entry made at the close of an accounting period for the purpose of attributing costs and revenues to their appropriate periods.

Income Statement

A financial statement that displays a company's financial performance by detailing revenues, expenses, and net income over a certain period.