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
richard carries policy 1 and was calculating his total health care costs for the year. he visited his doctor six times during the year and paid all of his premiums. what was his total annual cost?
$1,800
$3,080
$1,920
$2,320

Explanation:

Step1: Calculate annual premium

Annual premium = Monthly premium $\times$ 12. Given monthly premium of $150$, so annual premium = $150\times12 = 1800$.

Step2: Calculate total copayments

Copayment per visit is $20$ and number of visits is $6$. So total copayments = $20\times6=120$.

Step3: Calculate total annual cost

Total annual cost = Annual premium+Total copayments. So total annual cost = $1800 + 120=1920$.

Answer:

$1920$