Question

The Carter family has health insurance coverage that covers 90% of out-of-hospital expenses once a deductible of $300 (per person) is paid. Chris Carter had a serious illness that required hospitalization, with total medical bills amounting to $55,000. Assume there was a stop-loss provision of $5,000. How much will the Carter family pay?

A. $6,000
B. $5,770
C. $5,470
D. $5,240
E. $5,000

Answer 1

E. $5,000

Step-by-step explanation:

In the given case, as one time deductible fee = $300

Thus, this will be deducted from the annual bill of $55,000

Effective bill amount = $55,000 - $300 = $54,700

Non-covered amount of bill = $54,700
`*` 10% = $5,470

Now, total uncovered amount = $5,470 + $300 = $5,770

We see that this amount exceeds the stop loss provision amounting $5,000. Thus, the amount to be paid by Carter shall be: $5,000 only.

The remaining amount shall be paid by the insurance company.