C with major medical policy 80/20 coinsurance and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?

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Study for the Medical Expense Insurance Exam. Prepare with flashcards and multiple-choice questions; each has hints and explanations. Ace your exam!

Multiple Choice

C with major medical policy 80/20 coinsurance and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?

Explanation:
This tests how deductible and coinsurance combine to determine the insured’s out-of-pocket cost. The deductible must be paid first, then coinsurance applies to the remaining eligible charges. With a $400 deductible, the first $400 of the $2000 bill is paid by C. That leaves $2000 − $400 = $1600 subject to coinsurance. At 20% coinsurance, C pays 0.20 × $1600 = $320. Add the deductible: $400 + $320 = $720. The insurer covers the rest ($1280). So, the maximum C will pay in this scenario is $720.

This tests how deductible and coinsurance combine to determine the insured’s out-of-pocket cost. The deductible must be paid first, then coinsurance applies to the remaining eligible charges.

With a $400 deductible, the first $400 of the $2000 bill is paid by C. That leaves $2000 − $400 = $1600 subject to coinsurance. At 20% coinsurance, C pays 0.20 × $1600 = $320. Add the deductible: $400 + $320 = $720. The insurer covers the rest ($1280). So, the maximum C will pay in this scenario is $720.

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