You have a policy with a $1,000 deductible, 80/20 co-insurance, and a $7,500 maximum OOP. You become ill and are hospitalized for two days. The total cost for your treatment is $26,000. Answer the following questions. How much will you pay of the deductible?How much will you pay in co-insurance?What is the total OOP you will pay for this hospital visit?During the same policy year, you have an additional medical expense of $3,500. How much will you pay?What is your total OOP for the year-to-date?Later in the same policy year, you have a $5,000 charge for tests required after your previous hospital stay. How much will you pay

*Honor Code: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts for you. Please re-post the entire question with the sub-parts that need to be solved if you need the remaining sub-part to be solved. A coinsurance reveals a specified proportion of the covered claim the insured needs to pay in case the policy deductible is met. It is widely employed in health insurance and some property insurance agreements. In the context of health insurance, co-insurance entails the portion of a covered item or service that the insured party is responsible for paying after the policy deductible has been met.1. Since the deductible amount is $1,000 and none of the deductibles has been paid yet, the deductible amount that would be paid is $1,000.2. The policy is an 80/20 co-insurance which means that 20% of the hospital expense would be met by the insured (policyholder) and the remaining would be met by the insurer (insurance company). The total hospital expense is $26,000. The expense after deductibles can be derived by subtracting the deductible from the hospital expense. Calculation of expense after deductibles: Expense After Deductibles=Total Expense-Deductible=$26,000-$1,000=$25,000 The amount paid in co-insurance is derived by multiplying the insured's proportion by the expense after deductibles. Computation of amount paid in co-insurance: Amount Paid in Co-Insurance=Insured's Proportion×Expense after Deductibles=20%×$25,000=$5,0003. The sum paid as a deductible is $1,000 and the amount paid in co-insurance is $5,000. The total OOP (out-of-the-pocket) paid would be the sum of the deductible and co-insurance proportion. Determination of total OOP paid: Total OOP Paid=Deductible+Amount Paid in Co-Insurance=$1,000+$5,000=$6,000CONCLUSION: 1. The deductible paid is $1,000. 2. The co-insurance amount paid is $5,000. 3. The total OOP paid is $6,000.

Answered: You have a policy with a $1,000…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Question

You have a policy with a $1,000 deductible, 80/20 co-insurance, and a $7,500 maximum OOP. You become ill and are hospitalized for two days. The total cost for your treatment is $26,000. Answer the following questions.

How much will you pay of the deductible?
How much will you pay in co-insurance?
What is the total OOP you will pay for this hospital visit?
During the same policy year, you have an additional medical expense of $3,500. How much will you pay?
What is your total OOP for the year-to-date?
Later in the same policy year, you have a $5,000 charge for tests required after your previous hospital stay. How much will you pay

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

During the same policy year, you have an additional medical expense of $3,500. How much will you pay?
What is your total OOP for the year-to-date?
Later in the same policy year, you have a $5,000 charge for tests required after your previous hospital stay. How much will you pay?

Solution

by Bartleby Expert

SEE SOLUTION

Similar questions

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS