Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceMedium
A client has a comprehensive major medical policy with a $750 deductible and 80/20 coinsurance. After meeting the deductible, the client incurs $4,000 in covered medical expenses. What is the client's coinsurance payment?
- A$4,000
- B$650
- C$3,200
- D$800
Show answer & explanationAnswer & explanation
Correct answer: B. $650
First, subtract the deductible from the total covered expenses to find the amount subject to coinsurance. Then, calculate 20% of that remaining amount to determine the client's coinsurance payment.
Why the other options are wrong
- A. This would be the total covered expenses if the client paid 100% after the deductible, which is incorrect.
- C. This represents the insurer's portion of the payment, not the client's coinsurance payment.
- D. This would be 20% of the total expenses if there were no deductible, which is incorrect.
Coinsurance Calculation (Major Medical)
Coinsurance is the percentage of medical expenses a policyholder must pay after the deductible has been met. This sharing of costs is a common feature in major medical insurance policies.
- Applies AFTER the deductible is satisfied.
- Expressed as a percentage (e.g., 80/20, 70/30).
- Client pays the smaller percentage.
Memory trick: Deductible first, then split the bill!