Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceMedium
A client has a comprehensive major medical policy with a $1,000 deductible and a 90/10 coinsurance clause. After meeting their deductible, they incur $10,000 in covered medical expenses. How much will the insurance company pay for these expenses?
- A$8,100
- B$9,100
- C$8,000
- D$9,000
Show answer & explanationAnswer & explanation
Correct answer: A. $8,100
First, the client pays the $1,000 deductible. This leaves $9,000 ($10,000 - $1,000) in remaining expenses subject to coinsurance. With a 90/10 coinsurance, the insurance company pays 90% of the remaining $9,000, which is $8,100.
Why the other options are wrong
- B. This calculation is incorrect and does not follow the deductible and coinsurance structure.
- C. This only accounts for an 80% coinsurance after deductible.
- D. This would be the amount if there was no deductible or if the coinsurance applied to the full $10,000.
Coinsurance Calculation
The method of determining the insurer's and insured's share of covered medical expenses after the deductible has been met.
- Deductible is paid first by the insured.
- Coinsurance percentage applies to the remaining balance.
- Insurer pays their percentage, insured pays their percentage.
Memory trick: Deductible first, then split the rest!