State RegulationsOH specificDifficulty 1/5
Health insuring corporations finance coverage on a prepaid basis. This means that:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The prepaid basis is the defining financing method of the HIC model under Ohio Revised Code Chapter 1751: members pay a fixed periodic premium in advance, and in exchange the HIC assumes responsibility for providing or arranging the covered services during the coverage period. This contrasts with fee-for-service reimbursement, in which payment follows care, and it is the mechanism through which the HIC combines financing with delivery under Ohio Department of Insurance supervision.
Why the other options are wrong
- A) Members do not finance the full cost of care upfront; they pay a fixed periodic premium while the HIC bears the care cost.
- C) End-of-year claims review is not the payment trigger; the prepaid model funds care in advance of its use.
- D) Collecting money only when treatment occurs is retroactive financing, the opposite of the prepaid design.
Memory hook
Prepaid: premium first, care later — the HIC is paid before the patient is treated.