Question

In 2018, Dave is in an indemnity medical plan with a $1,800 annual deductible and an 90/10 split after the deductible. So the Coinsurance is 90%

a. On 2/15/2018 Greg injuries his arm and goes to the emergency room. The cost of his visit is $1,500. How much of that bill is Greg’s responsibility?

b. On 4/13/2018 Dave falls off a ladder and breaks his leg. His hospital stay costs $9,000. How much of the bill is Dave’s responsibility?

Answer 1

Solution-

Let us first understand the treatment of annual deductible in case of indemnity medical plan. Annual deductible which is to be paid to the insurance provider will be deducted from your medical bills until its full covered. After annual deductible is covered, rest of the money will be divided according to the Coinsurance %. In this case, Coinsurance is 90%. therefore, 90% of the medical bill will be covered by Insurance provider and 10% by the patient. Let us apply these basics to the question above-

Annual Deductible - $ 1800

Coinsurance Split- 90%-10%

a. Total Bill = 1500$ (point to be noted- Name Greg is given instead of Dave. It should be Dave or the question is incomplete)

First Annual deductible will be covered which is 1800. Since 1500 is less than 1800, whole bill will be paid by Dave and 300$ annual deductible will be carry forwarded.

b. total bill = $9000

annual deductible remaining = 300$

Amount remaining= 9000-300 = 8700$

part of it paid by Dave = 10% of 8700 = 870

therefore total bill paid by Dave = 870 + 300 = 1170$