Question

Eileen's health insurance had a $500 deductible and 80% / 20% coinsurance. Her first claim of the policy year amounted to $1,000, of which she paid $600. How much was her coinsurance?

Answer 1

The correct answer is: $100.

Step-by-step explanation:

Co-Insurance is a cost-sharing agreement between an insurer and an insured party. It says the insured will cover a set percentage of cost after paying the deductible. In co-insurance, the insurer and the insured share the risk. Some companies add a stop-loss clause to a co-insurance policy to protect themselves from, especially large claims.

In the example:

• Total claim = $1000
• Deductible = $500
• Balance after deductible = $1000 - $500 = $500

• Co-insurance = Balance after deductible x 20%
• Co-insurance = $500 x 20%
• Co-insurance = $100