Question

8. Terms of payment for medical expense plans But I Paid My Premiums! Besides possibly paying the premiums for a medical insurance plan, the insured is almost always responsible for making other, out-of-pocket payments. This practice helps keep overall costs down for both insureds and the insurance companies and ensures that insureds are infor about the costs of health care. med For each of the following scenarios, select which type of other cost or provision is illustrated. Skylar has had an illness and an accident during the year. Her combined out-of-packet expense for dents was $1,000. The insurance company will now start to pay some of her medical expenses. What does the $1,000 represent? O Participation (co-insurance) O Deductible O Coordination of benefits O Intemal limits Amy's been hospitalized for an illness. Her urance company has started paying 90% of covered medical expenses. What does the 10% of expenses Amy will have to pay out of her podket represent O Coordination of benefits O Deductible O Participation (co-insurance) O Intemal limits Maya has standard, personal medical insurance. After a recent accident, she visited the emergency room. One of the questions on the admission form asked if the accident occurred atwork. Q Deductible O Internal limits O Participation (co-insurance) O Coordination of benefits

Answer 1

1) Skylar had an illness and an accident during the year. Her combined out of pocket expense for both incidents are $1000. The insurance company will now start to pay some of her medical expenses. This $1000 represent Deductible

2) The 10% of the expense that Amy will have to pay out of her pocket represent the Participation(co-insurance)

3) Maya has standard personal medical insurance. After a recent accident, she visited the emergency room. One of the questions on the admission form asked if the accident occurred at work. This is a case of co-ordination of benefits

4) The case of Lian is a case of internal limits.

In case of a change in hospital policy, the out of pocket expense for Madison would increase by $300.

Policy Limit Total Claim (since there was a provision in the polciy which reduced hospital room rent to maximum specified in policy) Hospital charges $250 per day $750 Surgery costs Other medical costs Rehabilitation and therapy costs $45,000 $4,500 $25,000 $32,000 $3,850 $36,600 $2,500 Deductible Co-insurance percentage Total cost of Claim $2,500 80% 80% liability of insurance company is 1-coinsurance $6,820 Total cost to insurance company $6,820 Out of pocket expense for Madison $29,780 Savings for Madison 1. Borne by insurance 2. Savings in hospital charges Total $6,820 $300 $7,120