Question

Len's hospital and surgical expense policy pays $100 daily room and board and $1,000 for ancillary expenses. The surgical expense pays a maximum of $500. Len was hospitalized for 10 days with a $200 room and board charge. His ancillary expenses were $1,500 and his surgeon charged $2,000. How much will the insurance company pay?

Answer 1

The insurance company will pay a total of $2,500 for Len's hospital stay: $1,000 for room and board, $1,000 for ancillary expenses, and $500 for the surgery, based on the maximum coverage limits in his policy.

Step-by-step explanation:

The student is asking how much an insurance company will pay out based on a hospital and surgical expense policy. With daily room and board covered at $100 per day ancillary expenses covered up to $1,000, and a $500 cap on surgical expenses, we need to calculate the total coverage for each expense based on Len's actual costs during his hospital stay.

Len's room and board for 10 days at $100 per day would be $1,000 paid by insurance. His actual room and board cost was $200 per day, totaling $2,000, but since the policy only pays $100 per day, it will not cover the additional $100 per day.

Len's ancillary expenses totaled $1,500. However, the policy caps ancillary expenses at $1,000; therefore, insurance will pay $1,000 of these expenses.

Finally, Len's surgical expenses were $2,000, but the policy has a maximum payout of $500 for surgical expenses. Therefore, the insurance will cover $500 of the surgical bill.

In summary, the insurance company will pay $2,500 total: $1,000 for room and board, $1,000 for ancillary expenses, and $500 for surgical expenses.