Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Health InsuranceEasy
A Florida resident has a health insurance policy with a deductible of $1,000 and an 80/20 coinsurance clause. After meeting the deductible, they incur $5,000 in covered medical expenses. What is the maximum amount the insured will have to pay out of pocket for these additional expenses, assuming no out-of-pocket maximum has been met yet?
- A$200
- B$1,200
- C$4,000
- D$1,000
Show answer & explanationAnswer & explanation
Correct answer: D. $1,000
After the $1,000 deductible is met, the remaining $5,000 in expenses are subject to coinsurance. The insured's 20% share of this is $5,000 * 0.20 = $1,000. So, the insured pays $1,000 for these additional expenses.
Why the other options are wrong
- A. This would be 4% of the $5,000, not 20%.
- B. This amount incorrectly combines the deductible with some other calculation, or miscalculates the coinsurance.
- C. This would be the insurer's portion (80%) or an incorrect calculation of the insured's 20%.
Coinsurance
A cost-sharing provision in health insurance where the insured pays a percentage of covered medical expenses after the deductible has been met, and the insurer pays the remaining percentage.
- Applies after the deductible is satisfied
- Expressed as a percentage (e.g., 80/20, 70/30)
- Insured's share contributes to the out-of-pocket maximum
Memory trick: Deductible first, then split the rest.