72. A group major medical policy is written with a $1,000 deductible, 80/20 coinsurance, and an out of pocket maximum of $3,000. The insured goes into the hospital for a covered procedure. The total cost of the procedure is $5,000. How much does the subscriber have to pay towards the $5,000 total?
Answer: C
The subscriber has to pay $1,800 towards the $5,000 total.
To determine the amount the subscriber must pay, we first apply the $1,000 deductible, after which the remaining balance is subject to the 80/20 coinsurance.
A) $5,000
This option is incorrect because the total cost of the procedure is $5,000, but the insured is not responsible for the entire amount due to the deductible and coinsurance provisions in the policy.
B) $3,000
This option is also incorrect. Although the out-of-pocket maximum is $3,000, the insured does not reach this limit in this scenario, as the coinsurance after the deductible does not exceed this amount.
C) $1,800
This is the correct answer. After the $1,000 deductible is paid, the remaining balance is $4,000. With an 80/20 coinsurance, the insured pays 20% of this remaining amount, which is $800. Adding the $1,000 deductible results in a total of $1,800.
D) $1,000
This option is incorrect because it only accounts for the deductible and does not consider the additional amount due from the coinsurance after the deductible is met.
Conclusion
The subscriber pays a total of $1,800, which includes the $1,000 deductible and $800 from the coinsurance. Other options fail to account for the coinsurance correctly or suggest amounts that exceed or do not meet the required payments based on the policy's terms. Thus, option C is definitively correct.