Certified Application Counselor Practice Test

How is a health plan’s minimum value standard defined?

1. It pays at least 70% of total medical costs

2. It pays at least 60% of total medical costs and covers substantial physician and hospital services

3. It pays exactly 50% of total healthcare costs

4. It does not apply to emergency services

The correct answer is: It pays at least 60% of total medical costs and covers substantial physician and hospital services

The minimum value standard is defined as a health plan that pays at least 60% of total medical costs and covers substantial physician and hospital services. This standard was established under the Affordable Care Act (ACA) to ensure that health plans provide a meaningful level of coverage. A plan that meets this requirement must cover a broad range of essential health benefits, which typically includes services such as hospitalization, outpatient care, emergency services, maternity and newborn care, mental health services, prescription drugs, rehabilitation services, lab services, preventive and wellness services, and pediatric services. The standard is significant because it helps to determine whether a health plan is providing adequate coverage for individuals and families. Thus, any plan that pays less than 60% of total costs or does not include substantial coverage for the specified services would not meet this minimum value threshold. This approach helps protect consumers from plans that may offer low premiums but provide insufficient coverage for their healthcare needs.