JoEllen has a major medical policy with a $500,000 lifetime aggregate limit, a $1,000 annual deductible and 80% coinsurance. Her health losses for the year include the following: hospital bills of $42,000; surgeon's fees of $14,000, prescription medication expenses of $5,000. How much will JoEllen's insurance pay for this loss?

Question

Quizplus · Accepted Answer

JoEllen's insurance will pay $48,000 for this loss. The annual deductible is $1,000, so JoEllen is responsible for the first $1,000 of her medical expenses. The remaining $47,000 is subject to the 80% coinsurance, which means that JoEllen is responsible for 20% of the remaining balance, or $9,400. Therefore, JoEllen's insurance will pay $47,000 - $9,400 = $37,600.

JoEllen Has a Major Medical Policy with a $500,000 Lifetime