Question

An individual is insured under a major medical plan with a $1,000,000 lifetime benefit. The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a $50,500 medical expense during the calendar year, what is the remaining lifetime benefit?

Answer 1

The remaining lifetime benefit is $950,000.

Step-by-step explanation:

The remaining lifetime benefit can be calculated by subtracting the total medical expenses from the lifetime benefit. In this case, the insured suffers a $50,500 medical expense. The deductible of $500 is also subtracted from the medical expense. So the total amount paid by insurance is $50,500 - $500 = $50,000. The coinsurance rate is 80%, so the insurance covers 80% of the remaining amount, which is $50,000. Therefore, the remaining lifetime benefit is $1,000,000 - $50,000 = $950,000.