Question

Bob and Roberta are married and have two children. They are covered by a comprehensive medical and major medical policy with a $200 deductible per person, an 80/20 coinsurance provision, and an annual stop loss of $3,000. Bob dislocated his shoulder in November and needed surgery to fix the injury, which cost $35,000. Bob, Roberta, and each of the children had an annual physical exam earlier in January, which cost $250 each. Aside from these expenses, there were no other health care costs incurred by the family this year. How much will Bob have to pay out of pocket to cover the costs of his surgery?

Answer 1

Bob will have to pay a total of $3,000 out of pocket for his surgery.

Step-by-step explanation:

To calculate how much Bob will have to pay out of pocket for his surgery, we need to consider the deductible, coinsurance provision, and annual stop loss limit of his medical policy. Bob's surgery cost $35,000 and his policy has a $200 deductible per person.

This means Bob will have to pay the $200 deductible. After the deductible is met, the coinsurance provision of 80/20 kicks in, meaning the insurance company will cover 80% of the remaining costs.

The remaining cost after the deductible is $34,800 (35,000 - 200), and Bob will be responsible for paying 20% of that amount, which is $6,960.

However, his policy also has an annual stop loss limit of $3,000, which means Bob's out of pocket expenses will not exceed $3,000. Therefore, Bob will have to pay a total of $3,000 out of pocket to cover the costs of his surgery.