New York Child Abuse Identification and Reporting Practice Exam

What does first dollar coverage imply in insurance?

1. The policy pays only after a deductible is met

2. The policy starts paying as soon as covered medical expenses are incurred

3. The policy pays for wellness visits only

4. The policy provides coverage after a waiting period

The correct answer is: The policy starts paying as soon as covered medical expenses are incurred

First dollar coverage in insurance refers to a type of benefits where the insurer begins to pay for covered expenses without requiring the insured to meet a deductible first. This means that as soon as the insured incurs qualifying medical expenses, the insurance policy kicks in and starts covering those costs immediately. This type of coverage can be particularly advantageous for individuals who want to avoid out-of-pocket expenses before their insurance begins to provide benefits. In contrast, policies that require the insured to meet a deductible first or have specific waiting periods do not offer this immediate financial assistance for medical expenses. Additionally, a policy that only pays for certain types of services, such as wellness visits, does not align with the concept of first dollar coverage, which is broader and covers eligible expenses without restrictions on the type of service from the outset.