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Review health insurance plans below and answer the question in the blank provided. Show your work on a separate piece of paper. Plan Two: Deductible & 500 Co-insurance & 90 / 10 Out-of-Pocket Limit & 5,000 If a medical expense is 55,000 , how much does the policyholder need to pay? Answer:

Question

Review health insurance plans below and answer the question in the blank provided. Show your work on a separate piece of paper.
Plan Two:

 Deductible &  500 
 Co-insurance & 90 / 10 
 Out-of-Pocket Limit &  5,000 


If a medical expense is  55,000 , how much does the policyholder need to pay?
Answer:

Review health insurance plans below and answer the question in the blank provided. Show your work on a separate piece of paper. Plan Two: Deductible & 500 Co-insurance & 90 / 10 Out-of-Pocket Limit & 5,000 If a medical expense is 55,000 , how much does the policyholder need to pay? Answer:

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WynonaProfessional · Tutor for 6 years

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#Explanation#<br />In this question, we are asked to calculate the total amount the policyholder has to pay given a medical expense of $55,000 under Plan Two. The plan has a deductible of $500, a co-insurance of 90/10, and an out-of-pocket limit of $5,000.<br /><br />The deductible is the amount the policyholder must pay before the insurance company starts to pay. So, the policyholder will first pay the $500 deductible.<br /><br />After the deductible is met, the co-insurance kicks in. The co-insurance is a percentage that the policyholder and the insurance company share. In this case, it's 90/10, meaning the insurance company pays 90% of the remaining medical expenses and the policyholder pays 10%.<br /><br />However, there is also an out-of-pocket limit. This is the maximum amount the policyholder will have to pay for covered services in a policy period (usually a year). Once the out-of-pocket limit is reached, the insurance company pays 100% of the covered benefits for the rest of the policy period.<br /><br />Let's calculate the amount the policyholder needs to pay.<br /><br />#Answer#<br />First, the policyholder pays the $500 deductible. The remaining medical expense is $55,000 - $500 = $54,500.<br /><br />Next, the policyholder pays 10% of the remaining medical expense, which is $54,500 * 10% = $5,450. However, this amount exceeds the out-of-pocket limit of $5,000. So, the policyholder only needs to pay up to the out-of-pocket limit.<br /><br />Therefore, the total amount the policyholder needs to pay is the deductible plus the amount up to the out-of-pocket limit, which is $500 + $5,000 = $5,500.
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