Question

Nickolas Smith’s physician ordered lab work. His insurance determined the reasonable charge was $425.00. In accordance with his insurance plan, Nickolas will be billed a) _____, which is 20% coinsurance. The physician will receive payment of b) _____, which is the 80% that will be covered by the insurance plan.

Answer 1

Coinsurance refers to the splitting the cost of a healthcare service or medication that a person has received between the insurance company and the person after he/she has met the deductible. In simple terms, Nickolas coinsurance of 20% means his insurer will bear the 80% cost of the service received by him, and he has to pay the remaining 20%

Reasonable charge determined by the insurance = $ 425

Nickolas coinsurance = 20% of $ 425 = 20/100 x 425 = 425/5 = $ 85.

Similarly payment received by physician = 80% of $ 425 = 80/100 x 425 = $ 340.