1. Suppose Steve has an insurance policy with a $1,000 deductible, 20% coinsurance, and a $7,500 out-of-pocket maximum. A) How much is Steve responsible for a hospital bill of $2,000? B) Now suppose he has another bill for $25,000 because of a surgery in the same year. How much is he responsible for this second bill?
A) Bill is 2000$; 1000$ is deductible which needs to be paid by Steve. Out of the remaining $1000, 20% coinsurance of 20%*$1000=200$ is also to be paid by Steve. Total of $1200 paid by Steve. The remaining $800 will be paid by insurer.
B)Bill is 25000$ in the same year of coverage. Deductible (per claim assumed) is $1000 which needs to be paid by Steve. 20% of remaining amount =20%*(25000-1000)=$4800; So a total of 1000+4800=5800 $ needs to be paid by Steve. We can also double check that total payments by Steve is 1200+4800=$6000 for the year which is still within the max out of pocket expenses of 7500$ a year.
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