Dirk required surgery for a kidney impairment.His total bill for medical services was $50,000.Dirk has a medical expense policy with a $1,000 calendar-year deductible and a $5,000 annual out-of-pocket limit.His coinsurance percentage is 20 percent.The out-of-pocket limit applies to coinsurance only.Assuming this surgery and hospitalization were the first medical care that Dirk received during the year and that all of the hospital services were eligible for coverage under the policy,how much of the $50,000 bill will the insurer pay?

Question

Quizplus · Accepted Answer

Dirk's insurance policy includes a $1,000 deductible, which he must pay first. After the deductible, the policy covers a certain percentage of the remaining costs, with Dirk responsible for 20% coinsurance until he reaches his $5,000 out-of-pocket limit. The $5,000 limit includes the $1,000 deductible, so Dirk's additional out-of-pocket coinsurance amount is $4,000. The total bill is $50,000. After the $1,000 deductible, $49,000 remains. Dirk pays 20% of the costs until he reaches his out-of-pocket limit. The insurer pays the remainder, which is $44,000.

Dirk Required Surgery for a Kidney Impairment