A health insurance policy has $1,000 deductible and 80%/20% coinsurance of the next $3,000. The insured receives a medical bill of $5,000. How much would the insured be responsible to pay?

Rationale

$1,800 is the amount the insured would be responsible to pay.

To determine the total payment by the insured, we first account for the deductible and then apply the coinsurance to the remaining amount. After paying the deductible, the insured is responsible for 20% of the coinsured amount, leading to a total payment of $1,800.

A ($1,000) YOUR ANSWER

This choice only represents the deductible amount. The insured must pay this amount first before any coinsurance is calculated. Since the total medical bill exceeds the deductible, the insured’s responsibility will be greater than $1,000 after applying the coinsurance.

B ($1,800) CORRECT

This amount reflects the correct calculation: the insured pays a $1,000 deductible, followed by 20% of the next $3,000 (which is $600), resulting in a total of $1,600 + $600 = $1,800. This accounts for the full cost-sharing structure of the insurance policy.

C ($3,000) YOUR ANSWER

This option miscalculates the responsibility after the deductible and coinsurance. While the total bill exceeds $3,000, the insured only pays a portion of the costs after the deductible is applied and the coinsurance is considered. Therefore, $3,000 does not accurately represent the total payment owed.

D ($4,000) YOUR ANSWER

This choice incorrectly adds the deductible and the total coinsurance amount without proper calculation. The insured does not pay the entire amount of the medical bill; rather, they pay the deductible and then their share of coinsurance on the remaining costs, resulting in a lower total than $4,000.

Conclusion

In summary, under the given health insurance policy, the insured is responsible for a $1,000 deductible followed by 20% of the subsequent $3,000, which totals $1,800. This illustrates the important role of deductibles and coinsurance in determining out-of-pocket costs for medical expenses, highlighting how insured individuals share financial responsibility with their insurance providers.

A health insurance policy has $1,000 deductible and 80%/20% coinsurance of the next $3,000. The insured receives a medical bill of $5,000. How much would the insured be responsible to pay?

$1,800 is the amount the insured would be responsible to pay.

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