James was injured in a freak accident in his dorm room and had to spend several days in the hospital.His covered medical costs totaled $8,000.How much will James's health insurance policy pay for this claim given the following policy information?
$400 deductible per year
80/20 coinsurance
$2,000 per year out-of-pocket coinsurance cap

Question

Quizplus · Accepted Answer

First, James's $400 deductible must be applied, leaving $7,600 in covered expenses.

Next, the insurance policy pays 80% of the covered expenses, leaving James responsible for the other 20%.

This means that insurance will pay 80% of $7,600, or $6,080.

Lastly, since James has an out-of-pocket maximum of $2,000 per year, he will not have to pay any more than that.

Therefore, the insurance will pay $6,080 and James will pay $2,000, for a total of $8,080 which covers the entire medical expense.

James Was Injured in a Freak Accident in His Dorm