barry has a medical plan with a $1,200 deductible, 20% coinsurance, and a $5,000 coinsurance cap. his…
barry has a medical plan with a $1,200 deductible, 20% coinsurance, and a $5,000 coinsurance cap. his allowable medical expenses during the past year are $18,000. how much of this amount will he have to pay out of pocket? a. $3,600 b. $3,360 c. $4,360 d. $5,000
Answer
Explanation:
Step1: Pay the deductible
Barry first pays the deductible of $1200.
Step2: Calculate coinsurance amount
The remaining eligible expense is $18000 - 1200=16800$. The coinsurance amount he pays is 20% of this remaining amount, so $0.2\times16800 = 3360$.
Step3: Check coinsurance cap
The sum of the deductible and coinsurance is $1200 + 3360=4560$. Since $4560<5000$ (coinsurance cap), this is the total out - of - pocket amount.
Answer:
C. $4,560