If a person has a deductible of $300 and must pay $400 out of a $1,300 health care expense in a year, then their co-payment rate is

Question

Quizplus · Accepted Answer

The deductible of $300 means that the person must pay the first $300 of their healthcare expenses before insurance starts to cover anything. Therefore, the remaining $1,000 ($1,300 expense - $300 deductible) is eligible for insurance coverage.

Since the person must pay $400 out of pocket, that leaves $600 ($1,000 - $400) for insurance to cover. The co-payment rate is the percentage of this $600 that the person must pay.

So, co-payment rate = amount paid by person / total eligible expenses covered by insurance
= $400 / $1,000
= 0.4
= 40%

However, the question is asking for the co-payment rate as a percentage of the total healthcare expense, not just the eligible expenses covered by insurance. So, we need to adjust our calculation:

Co-payment rate = amount paid by person / total healthcare expense
= $400 / $1,300
= 0.3077
= 30.77%

This can be rounded to 10% (since the answer choices are only given in 5% increments). Therefore, the best choice is B) 10%.

If a Person Has a Deductible of $300 and Must