Question

A health insurance plan has a deductible of $400.00 and coinsurance of 20%. A person with this insurance has $4,200.00 of medical bills. What is this person’s out-of-pocket payment?

a) $760.00
b) $840.00
c) $1,160.00
d) $1,240.00

Answer 1

To calculate the person's out-of-pocket payment, subtract the deductible from the medical bills and calculate the coinsurance payment. Then, add the deductible and the coinsurance payment to find the person's out-of-pocket payment. In this case, the person's out-of-pocket payment is $1,160.00.

Step-by-step explanation:

To calculate the person's out-of-pocket payment, we first need to determine the amount that exceeds the deductible. In this case, the medical bills are $4,200.00, and the deductible is $400.00. So, the amount that exceeds the deductible is $4,200.00 - $400.00 = $3,800.00.

Next, we need to calculate the coinsurance payment. The coinsurance is 20%, which means the person is responsible for 20% of the amount that exceeds the deductible. So, the coinsurance payment is 20% of $3,800.00, which is $3,800.00 * 0.20 = $760.00.

Finally, the person's out-of-pocket payment is the sum of the deductible and the coinsurance payment, which is $400.00 + $760.00 = $1,160.00. Therefore, the correct answer is c) $1,160.00.