Question

four health insurance policies
the costs and coverages for four different health insurance policies are listed. premiums are the amount that one pays for the insurance policy. deductibles are the amounts paid out - of - pocket for an insurance claim before the insurance company pays for expenses. copayments are paid out - of - pocket for each doctor visit. coinsurance is paid out - of - pocket for medical expenses after the policys deductible has been met, usually represented as a percentage of the total bill. the out - of - pocket maximum is the limit that a person pays for their health insurance in a given year, including deductibles, copayments, and coinsurance.
policy 1
premium: $150 per month
deductible: $2,500 per year
copayment: $20 per doctor visit
coinsurance: 20% after the deductible is met
out - of - pocket maximum: $5,000
assume a person has policy 1 and visits their doctor four times during the year.
what is the persons total annual cost?
$1,800
$80
$2,500
$1,880

Explanation:

Step1: Calculate annual premium

There are 12 months in a year. The monthly premium is $150, so the annual premium is $150\times12 = 1800$.

Step2: Calculate total copayments

The copayment per doctor - visit is $20 and the person visits the doctor 4 times. So the total copayment is $20\times4=80$.

Step3: Calculate total annual cost

Since the deductible of $2500 has not been met (no information about medical - bills to meet the deductible), the total annual cost is the sum of the annual premium and the total copayments. So the total annual cost is $1800 + 80=1880$.

Answer:

$1,880