Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceHard
A client has a comprehensive major medical policy with a $2,000 deductible and a 90/10 coinsurance clause. The policy includes a stop-loss limit of $8,000 (excluding the deductible). If the client incurs $75,000 in covered medical expenses, what is the maximum amount the client will pay out-of-pocket?
- A$10,000
- B$2,000
- C$10,500
- D$8,000
Show answer & explanationAnswer & explanation
Correct answer: A. $10,000
The client first pays the $2,000 deductible. The stop-loss limit of $8,000 (excluding deductible) means the client's coinsurance payments will not exceed $8,000. So, the maximum out-of-pocket for the client is the deductible plus the stop-loss limit: $2,000 (deductible) + $8,000 (coinsurance cap) = $10,000.
Why the other options are wrong
- B. This only accounts for the deductible, ignoring coinsurance and the stop-loss limit.
- C. This would be an overcalculation, possibly misinterpreting the stop-loss limit or coinsurance.
- D. This only accounts for the stop-loss limit, ignoring the deductible.
Stop-Loss Limit (Major Medical)
A provision in a major medical policy that caps the total amount an insured person must pay out of their own pocket (excluding premiums) in a given year, combining the deductible and coinsurance payments.
- Protects insured from catastrophic medical bills.
- Once reached, the insurer pays 100% of remaining covered costs.
- Can be stated as including or excluding the deductible.
Memory trick: Deductible + Stop-Loss = Your Total Max Pain.