Question

Calculate your total health insurance premium AND healthcare expenses for the year: Premium is $1,000/month, deductible is $4,000, 50% coinsurance, out-of-pocket maximum of $8,000, and you have $250,000 in qualified healthcare expenses.

a) Total cost of annual premiums: $12,000, Deductible: $4,000, Coinsurance: $123,000, Out-of-pocket maximum reached, Total cost: $8,000

b) Total cost of annual premiums: $12,000, Deductible: $4,000, Coinsurance: $123,000, Out-of-pocket maximum not reached, Total cost: $131,000

c) Total cost of annual premiums: $1,000, Deductible: $4,000, Coinsurance: $123,000, Out-of-pocket maximum reached, Total cost: $8,000

d) Total cost of annual premiums: $1,000, Deductible: $4,000, Coinsurance: $123,000, Out-of-pocket maximum not reached, Total cost: $128,000

Answer 1

The total cost of the annual premiums would be $12,000. The deductible is $4,000, and 50% coinsurance would apply after the deductible is met. However, there is an out-of-pocket maximum of $8,000, which would be reached with $250,000 in healthcare expenses for the year.

Step-by-step explanation:

The total cost of annual premiums would be $12,000 ($1,000/month x 12 months). The deductible is $4,000, which means the policyholder would need to pay this amount out-of-pocket before the insurance company pays the rest of the bill.

With 50% coinsurance, the policyholder would be responsible for paying 50% of the healthcare expenses after the deductible has been met.

However, there is an out-of-pocket maximum of $8,000, which means once the policyholder reaches this limit, the insurance company would cover the remaining costs.

In this case, with $250,000 in qualified healthcare expenses, the out-of-pocket maximum would be reached, and the total cost for the year would be $8,000.