Question

Nick has a comprehensive health care policy with a $250 per-calendar-year deductible, an 80% co-insurance provision, and a $1,000 copayment cap per calendar year. In January, Nick had a $600 claim for which the insurance company paid $280. Nick experiences another unrelated claim in October resulting in total bills of $5,000. How much will Nick have to pay for the second claim?

a. $5,000
b. $3,930
c. &1,800
d. $930

Answer 1

Nick will need to pay $930 for the second health insurance claim. After accounting for the deductible he already met and applying the 20% co-insurance rate to the second claim, his payment falls under the $1,000 copayment cap for the year.

Step-by-step explanation:

To calculate how much Nick will have to pay for the second health insurance claim in October with total bills of $5,000, we need to consider the deductible, the co-insurance, and the copayment cap for the calendar year. Nick has already met his $250 deductible with the first claim in January and also encountered some of the co-insurance. For the second claim, he's responsible for 20% co-insurance until he reaches his $1,000 copayment cap for the year.

First claim:

1. Total bill: $600
2. Deductible paid: $250
3. Remainder: $350
4. Insurance pays 80%: $280
5. Nick pays 20%: $70

Second claim in October (ignoring the $250 deductible which is already met):

1. Total bill: $5,000
2. Co-insurance (20% of $5,000): $1,000
3. However, Nick's co-insurance payments already include $70 from the first claim, so for the second claim: $1,000 - $70 = $930

Since Nick's co-insurance payments for the year have not yet reached the copayment cap, he is responsible for the $930. Therefore, Nick will have to pay $930 for the second health insurance claim.

Answer 2

Nick pay maximum $930

so correct option is d. $930

Step-by-step explanation:

given data

health care policy = $250

co-insurance provision = 80 %

it mean claim to be paid by insurance company = 80%

and claim to be paid by Nick = 20 %

co payment cap = $1,000

claim insurance = $600

company paid = $280

total bills = $5,000

to find out

How much will Nick have to pay for the second claim

solution

we get first amount to be paid by insurance company and nick is

amount to be paid by insurance company and nick = $600 - $250

amount to be paid by insurance company and nick = $350

and

we know here 80% of $350 paid by insurance company

so paid by insurance company = 80% of $350 = $280

and paid by Nick = $350 - $280 = $70

so Limit available to co payment = $1000 - $70

Limit available to co payment = $930

so Nick pay maximum $930

so correct option is d. $930