Question

Mr Johns has a major medical insurance policy with a $1,000 deductible and an 80% coninsurance clause. He becomes ill and is admitted to the hospital for several days. When he is discharged, his hospital bill is $5,000 and his doctor bills are 2,500. what is the amount that his insurance co-pay will pay?

A) $5,200
B) $6,000
C) $6,500
D) $7,500

Answer 1

After subtracting the $1,000 deductible from the total bill of $7,500, you apply the 80% coinsurance to the remaining $6,500. The insurance company will pay $5,200.

Step-by-step explanation:

Mr. Johns has a major medical insurance policy with a $1,000 deductible and an 80% coinsurance clause. To determine how much the insurance company will pay, we first subtract the deductible from the total medical costs, and then apply the coinsurance rate to the remaining amount.

The hospital bill is $5,000 and the doctor bills are $2,500, making the total $7,500. Subtracting the deductible of $1,000 leaves $6,500. The insurance company will pay 80% of the remaining $6,500, which equals $5,200. Thus, the answer to how much his insurance co-pay will pay is $5,200, option A).