Question details

BUSN380 Week 6 TCO 4 Problem Set 6 - Home, Automobile, Health, & Life Insurance 2
$ 15.00

Current policy less deductible: $8,893 – $750 = $8,143

If policy pays 85% then Sarah must pay 15%, so $8,143 x .15 =  $1,221.45

Add the (deductible) $750 Total paid = $1,971.45.

Sarah’s friend was wrong

With stop-loss, Sarah would have paid the first $3,000 instead of the $1,971.45 she paid with her current policy. Her current policy costs less by $1,028.55 ($3,000 – $1,971.45).

 

 

     

4The Kelleher family has health insurance coverage that pays 80 percent of out-of-hospital expenses after a $500 deductible per person. If one family member has doctor and prescription medication expenses of $1,100, what amount would the insurance company pay?

      Ans.

Out-of-hospital related costs (prescription medication expenses) = $1100.00
Deductible = $500
Insurance Coverage = 80%
So,
$1100 – $500 = $600
.80 x 600 = $480
 

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