Question

Suppose a person has a health insurance policy with a $500 calendar-year deductible, a $2,000 out-of-pocket cap, and an 80% coinsurance provision. If this person suffers a $600 covered loss, how much will the insurance company pay? (Assume no previous losses have occurred.)

Answer 1

Answer:

The insurance company will pay for $80

Explanation:

$600 covered loss - $500 deductible = $100

The coinsurance will apply to $80 of the remaining $100 (100 x 80%)

The insurance company will pay for $80