Question

When a managed care plan covers 80% of a prescription cost, and the patient pays the remaining 20%, this payment arrangement is known as what?

a) Copayment
b) Deductible
c) Coinsurance
d) Out-of-pocket cost

Answer 1

Coinsurance is the payment arrangement where a managed care plan covers 80% of a prescription cost and the patient pays the remaining 20%.

Step-by-step explanation:

The payment arrangement you are describing, where a managed care plan covers 80% of a prescription cost and the patient pays the remaining 20%, is known as coinsurance. Coinsurance is a form of cost-sharing in which the policyholder pays a certain percentage of the costs, while the insurance company covers the remaining percentage.

This payment arrangement helps reduce moral hazard by requiring the insured party to bear some of the costs before collecting insurance benefits. It encourages individuals to be more mindful of their healthcare expenses and can potentially lower overall healthcare consumption.