Question

. Ashley has an individual medical expense insurance policy with a $1,000 calendar-year deductible and a 80–20 percent coinsurance clause. Ashley had outpatient surgery to remove a bunion on her foot and incurred medical bills of $10,000. How much will Ashley’s insurer pay? How much will Ashley have to pay?

Answer 1

Answer:

Amount insurer pays = $7000

Amount Ashley pays = $3000

Explanation:

Given that

Deductible = 1000

Incured medical Bill's = 10,000

On a 80-20 coinsurance clause

The insurer pays 80% of incured cost minus deductible and Ashley pays 20% of incured cost plus deductibles.

Therefore

Amount insurer pays = (10000 × 0.8) - 1000

= 8000 - 1000

= $7000

Amount Ashley Pays = (10000 × 0.2) + 1000

= 2000 + 1000

= $3000

Answer 2

Answer:

Ashley will pay $2,800

Ashley's insurer will pay $7,200

Explanation:

Given the following ;

Ashley's Deductible Insurance expense = $1000

Coinsurance clause = 80 - 20

Ashley's insurer percentage = 80%

Ashley's percentage = 20%

Total bill incurred = $10,000

With Ashley's deductible expense :

Total Bill left = $10,000 - $1,000(deductible insurance) = $9000

Ashley's share of total bill left :

0.2 × $9000 = $1800

Ashley's total = $1000 + $1,800 = $2,800

Ashley's insurer :

Percentage × total bill left

0.8 × $9000 = $7,200