Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceMedium
A client has a comprehensive major medical policy with a $500 deductible and 80/20 coinsurance. The policy also includes a stop-loss limit of $5,000 (excluding the deductible). If the client incurs $25,500 in eligible medical expenses, what is the maximum out-of-pocket amount the client will have to pay?
- A$5,000
- B$5,900
- C$6,000
- D$5,500
Show answer & explanationAnswer & explanation
Correct answer: D. $5,500
The client pays the $500 deductible. Then, coinsurance applies until the client's portion reaches the $5,000 stop-loss limit. The total out-of-pocket is the deductible plus the stop-loss limit ($500 + $5,000 = $5,500).
Why the other options are wrong
- A. This only accounts for the stop-loss limit, not the deductible.
- B. This incorrectly calculates the coinsurance portion or ignores the stop-loss.
- C. This is an incorrect calculation; the stop-loss limits the coinsurance exposure.
Stop-Loss Limit (Major Medical)
A feature in major medical insurance that sets a maximum amount of out-of-pocket expenses an insured will have to pay in a policy period, typically including the deductible and the insured's coinsurance portion.
- Protects against catastrophic medical costs.
- Once reached, the insurer pays 100% of remaining covered expenses.
- Usually includes the deductible and the insured's coinsurance share.
Memory trick: Deductible first, then coinsurance, but a stop-loss saves the day.