Harold has a group medical policy through his employer with a $200 deductible and a 90% coinsurance provision. Harold incurs $1,200 in covered health care services. How much will his group insurance carrier pay?

Rationale

$900

Harold's group insurance policy requires him to pay the $200 deductible upfront before coinsurance applies. With a 90% coinsurance provision, the insurance carrier covers 90% of the remaining costs after the deductible is met.

A ($200) YOUR ANSWER

The $200 deductible is the initial amount Harold must pay out of pocket before the coinsurance provision activates. This sum represents the portion of covered expenses that the insured individual is responsible for before the insurance plan contributes.

B ($900) CORRECT

After Harold pays the $200 deductible, the insurance carrier covers 90% of the remaining $1,000 in costs, leaving Harold responsible for the remaining 10%. Therefore, the insurance carrier will pay $900 towards the covered health care services.

C ($1,000) YOUR ANSWER

While the total incurred cost is $1,200, the insurance carrier's coinsurance provision applies only to the amount exceeding the deductible. After the deductible, the carrier covers 90% of the remaining $1,000, not the full $1,200.

D ($1,080) YOUR ANSWER

This amount is calculated incorrectly. Harold pays the $200 deductible first, and then the insurance carrier covers 90% of the remaining $1,000, resulting in a different payment amount.

Conclusion

In this scenario, Harold's group insurance carrier will pay $900 towards the covered health care services, as determined by the deductible and coinsurance provision outlined in his policy. Understanding how deductibles and coinsurance interact is crucial for individuals to accurately anticipate their out-of-pocket expenses and the extent of coverage provided by their insurance plans.

Harold has a group medical policy through his employer with a $200 deductible and a 90% coinsurance provision. Harold incurs $1,200 in covered health care services. How much will his group insurance carrier pay?

$900

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