Question

Kim Barney pays a $290.00 annual premium for an insurance plan with a $500 deductible. The company pays 80% of the remaining expense. If Kim had $2,500.00 in medical expenses, calculate the following.

(Use a thousand comma where applicable.)
A. Kim's annual premium plus deductible: $
B. The insurance company's payment of the medical expense: $
C. Kim's total medical expenses divided by her premium plus deductible (to nearest hundredth):
D. Kim's medical expense less the insurance payment: $
E. The percentage of her medical expense covered by insurance: %

Answer 1

Kim's annual premium plus deductible is $790. The insurance company will pay $1,600 towards Kim's medical expenses. Kim's total medical expenses divided by her premium plus deductible is approximately $3.16. Kim's medical expense less the insurance payment is $900. The insurance company covers 64% of Kim's medical expenses.

Step-by-step explanation:

Kim's annual premium plus deductible:

$290 (premium) + $500 (deductible) = $790

The insurance company's payment of the medical expense:

Total expenses to be paid by insurance = $2,500 (medical expenses) - $500 (deductible) = $2,000

Insurance payment = 80% of $2,000 = $1,600

Kim's total medical expenses divided by her premium plus deductible:

Total medical expenses = $2,500

Total cost paid by Kim (premium plus deductible) = $790

Kim's total medical expenses divided by her premium plus deductible = $2,500 / $790 = $3.16 (to the nearest hundredth)

Kim's medical expense less the insurance payment:

Medical expense less insurance payment = $2,500 - $1,600 = $900

The percentage of her medical expense covered by insurance:

Percentage covered by insurance = (Insurance payment / Total medical expenses) * 100

Percentage covered by insurance = ($1,600 / $2,500) * 100 = 64%