TOOLS & TECHNIQUES OF EMPLOYEE BENEFIT AND RETIREMENT PLANNING
11th Edition
College Course Materials
Deanna L. Sharpe, Ph.D., CFP®, CRPC®, CRPS®
Associate Professor
CFP® Program Director
Personal Financial Planning Department
University of Missouri-Columbia
Please Note: Correct answers for each question are indicated in bold type. After each question,
the number of the page containing information relevant to answering the question is given. When
a calculation is necessary or the reasoning behind a given answer may be unclear, a brief
rationale for the correct answer is also given.
Part A: Retirement Planning
Government Benefits
Chapter 4: Medicare
True/False
4.1
The Prescription Drug Insurance offered as Medicare Part D is funded solely by the
government
4.2
Medicare Advantage (Part C) plans are limited to Health Maintenance Organizations
(HMOs), Preferred Provider Organizations (PPOs) and Provider Sponsored Organizations
(PSOs)
4.3
Enrollment in Medicare Part A for individuals aged 65 and older who are entitled to Social
Security retirement benefits is voluntary and requires payment of a nominal monthly
premium.
Answers:
4.1
4.2
4.3
False [p. 39]
False [p. 39]
False [p. 40]
Multiple Choice
4.4
A Medigap policy
a. will cover any out-of-pocket expenses
b. is designed to help pay deductibles and coinsurance incurred by those enrolled in Part
A and Part B of Medicare
c. may pay for certain items or services not covered by Medicare
d. a and b
e. b and c
Answer: E [p. 39]
4.5
Which of the following types of health care is not covered under Medicare Part A
a.
b.
c.
d.
e.
home health visits
hospice care for terminally ill patients
physical therapy
inpatient hospital care
post-hospital extended care
Answer: C [p. 41]
4.6
Which of the following parts of Medicare is (are) funded by payroll tax?
a.
b.
c.
d.
e.
Hospital Insurance
Medical Insurance
Medicare Advantage
Prescription Drug Insurance
Medicare Supplement Insurance
Answer: A [pp. 45-46]
Application
4.7
Mrs. Albright is covered under Medicare Part A. She was hospitalized on June 4. She was
discharged on June 10. She was hospitalized again in late September for 5 days. Which
of the following is true?
a. Medicare Part A will cover all costs of the first hospitalization but will require a
deductible for the second hospitalization
b. since both hospitalizations occurred in the same year, Mrs. Albright need only pay the
deductible for the first hospitalization
c. Medicare Part A will cover only one hospitalization per calendar year, so her second
hospitalization is not covered
d. Medicare Part A will cover both hospitalizations, but Mrs. Albright must pay a
deductible for each one
e. Medicare Part A will cover all costs of both hospitalizations since, taken together, Mrs.
Albright did not exceed her 60 days of hospitalization per year
Answer: D [p. 41]
4.8
Mr. Teague is covered under Medicare Part A. He was hospitalized on August 10 and
discharged on August 15. Complications set in and he was readmitted to the hospital on
August 25. Which of the following is true?
a. Medicare Part A counts both hospitalizations as part of his first benefit period
b. Since both hospitalizations occurred in the same year, Mr. Teague need only pay the
deductible for the first hospitalization
c. Medicare Part A will cover only one hospitalization per calendar year, so his second
hospitalization is not covered
d. Medicare Part A will cover both hospitalizations, but Mr. Teague must pay a deductible
for each one
e. Medicare Part A will cover all costs of the first hospitalization but will require a
deductible for the second hospitalization
Answer: A [p. 41]
4.9
Dr. Curt N. Short practiced medicine in a general partnership for 15 years prior to his
retirement this year at age 55. Is he eligible for Medicare benefits this year?
a. yes
b. no
Answer: B [p. 39]
4.10
Elsie and her husband Zeb were married 55 years before he died last year. When Zeb
retired at age 65, he began receiving benefits from Social Security and Medicare Part A.
As a life-long homemaker, Elsie receives spouse benefits from Social Security. Earlier this
year, at age 75, Elsie was in a car accident, breaking her hip and cracking 4 ribs. After two
weeks in the hospital, she was transferred to a skilled nursing facility for 10 more days.
After her discharge, a visiting nurse came by her home once a week. Which of the
following services are covered under Medicare Part A for Elsie?
a.
b.
c.
d.
inpatient hospital care only
inpatient hospital care and post-hospital extended care in a skilled nursing facility
inpatient hospital care and home health service benefits
post-hospital extended care in a skilled nursing facility home and health service
benefits
e. inpatient hospital care, post-hospital extended care in a skilled nursing facility home
and health service benefits
Answer: E [p. 41 – Elsie’s time in each facility falls within the coverage limits of Medicare Part A]