Question

Peter has a health insurance policy that includes a deductible of $1,500, a coinsurance of 20%, and a stop-loss of $5,000. If his total bill is $20,000, how much will he pay? Show all calculations and explain your answer.

Answer 1

Peter will either pay the calculated amount using the deductible and coinsurance OR the stop-loss amount, whichever is lower.
Peter's deductible = $1,500.
coinsurance = 20% (total bill - deductible)

20%*($20000 - $1000) = 20% * $19000 = $3,800

Total out of pocket = the deductible + coinsurance =$1500 + $3800 = $5300

However his stop- loss is $5,000. Here we consider the lower amout and stop loss is lower than the total out of pocket. Therefore, the most Peter will pay is $5000.

Answer is $5000.