Question

1. A health insurance policy pays 60 percent of physical therapy costs after a $100 deductible. In contrast, an HMO charges $19 per visit for physical therapy. How much would a person save with the HMO if he or she had 10 physical therapy sessions costing $35 each?

A: Amount of savings = $

2. The Kelleher family has health insurance coverage that pays 80 percent of out-of-hospital expenses after a $500 deductible per person. If one family member has doctor and prescription medication expenses of $1,440, what amount would the insurance company pay?(Do not round intermediate calculations.)

A: Insurance Payment = $

3. Ariana’s health insurance policy includes a deductible of $1,100 and a coinsurance provision requiring her to pay 20 percent of all bills. Her total bill is $8,800. What is Ariana’s total cost?

A: Insured's cost= $

Answer 1

1.

Coinsurance expenses = Total expenses - Deductible
= (10 × $35) - $100
= $250

Insured's cost = Deductible + [(1 - Coinsurance percent) × Coinsurance expenses]
= $100 + [(1 - 0.60) × $250]
= $200

HMO:
Insured's cost = Number of visits × Cost per visit
= 10 × $19
= $190

Insured's savings with HMO = Health insurance policy costs - HMO costs
= $200 - 190

= $10

2.

Insurance payment = ($1440 - $500) * 80%

= $752

3.

Insured cost = ($8800-$1100) * 20% + $1100

= $2640