In Order to Cover Some of the Gap Between FFS

question 24

Multiple Choice

In order to cover some of the gap between FFS Medicare coverage and the actual cost of services, beneficiaries often rely on Medicare supplements. Which of the following statements about Medicare supplements is correct?

• A) The initial ten (A-J) Medigap policies offer a basic benefit package that includes coverage for Medicare Part A and Medicare Part B coinsurance.
• B) Each insurance company selling Medigap must sell all the different Medigap policies.
• C) Medicare SELECT is a Medicare supplement that uses a preferred provider organization (PPO) to supplement Medicare Part A coverage.
• D) Medigap benefits vary by plan type (A through L), and are not uniform nationally.

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Definitions:

Surplus

Surplus refers to the situation where the quantity of a good or service supplied exceeds the quantity demanded, often leading to a decrease in prices.

Producer Surplus

Producer surplus is the difference between what producers are willing to accept for a good or service and the actual price they receive, reflecting the profit earned above production costs.

Price

The sum of money anticipated, needed, or handed over in exchange for something.

Consumer Surplus I

The gap between what consumers are prepared and able to spend on a product or service and what they end up paying.