An individual health insurance policy issued by Company X has a 2,000 deductible, 70% coinsurance, and a 5,000 out of pocket expense maximum that includes the deductible.
While the policy is effective, a policyholder incurs 18,500 of billed charges from a single provider for covered services. This provider is contracted with Company X to provide a 40% discount on all covered services.
No other charges are incurred by the policyholder.
Calculate Company X’s payment to the provider.
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
Key: E
18,500 * 60% = 11,100 of allowed charges 11,100 – 2,000 = 9,100 of allowed charges in excess of the deductible 9,100 * 70% = 6,370 9,100 * 30% = 2,730 2,000 + 2,730 = 4,730, which is below the 5,000 out of pocket maximum
Company X’s payment to the provider should be 6,370.
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.