Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Health InsuranceHard
A Florida resident is comparing two individual health insurance plans. Plan A has a $2,000 deductible and a 90/10 coinsurance, with an out-of-pocket maximum of $5,000. Plan B has a $1,000 deductible and an 80/20 coinsurance, with an out-of-pocket maximum of $6,000. If the resident incurs $12,000 in covered medical expenses, how much more would they pay under Plan B compared to Plan A?
- A$400
- B$300
- C$100
- D$200
Show answer & explanationAnswer & explanation
Correct answer: D. $200
Under Plan A, the resident pays $2,000 deductible + 10% of ($12,000 - $2,000) = $2,000 + $1,000 = $3,000. Under Plan B, the resident pays $1,000 deductible + 20% of ($12,000 - $1,000) = $1,000 + $2,200 = $3,200. The difference is $3,200 - $3,000 = $200.
Why the other options are wrong
- A. Incorrect calculation. This might occur if the out-of-pocket maximums were incorrectly applied or calculations were flawed.
- B. Incorrect calculation. This could be due to errors in applying deductible or coinsurance.
- C. Incorrect calculation. This might result from miscalculating the coinsurance portion.
Health Plan Cost-Sharing Calculation
The process of determining the insured's financial responsibility for medical services, involving deductibles, coinsurance, and out-of-pocket maximums.
- Deductible: Amount paid by insured before insurance pays.
- Coinsurance: Percentage of costs shared after deductible.
- Out-of-Pocket Maximum: Cap on insured's annual spending for covered services.
Memory trick: Deduct then Co-pay, but don't exceed the Max.