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.

• 3,780
• 4,100
• 4,620
• 6,100
• 6,370

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.