Question 44

Plan A pays up to $4,000 and Plan B pays up to $2,000

Under the coordination of benefits provision, when a person is covered by two plans and incurs expenses exceeding the maximum limit of the primary plan, the total payment is determined by the limits of both plans. In this scenario, Plan A pays its maximum of $4,000, and Plan B covers the remaining expenses up to its limit, which totals $2,000.

A) Plan A pays up to $6,000

This option is incorrect because Plan A has a maximum coverage limit of $4,000. Even though the incurred expenses are $6,000, Plan A will only pay up to its stated limit.

B) Plan A pays up to $3,000 and Plan B pays up to $3,000

This option is incorrect as it misrepresents the coordination of benefits. Plan A is the primary plan and will pay its maximum limit of $4,000, not $3,000. Furthermore, Plan B's payment is contingent upon the primary plan's payout.

C) Plan A pays an adjusted percentage and Plan B pays the remainder

This option is inaccurate in this context because it implies a percentage-based payment system which is not applicable here. With specific limits on payouts, Plan A pays its maximum, and any remaining costs are covered by Plan B up to its limit.

D) Plan A pays up to $4,000 and Plan B pays up to $2,000

This option is correct. Plan A, as the primary plan, pays its maximum of $4,000 for the incurred expenses. The remaining $2,000 (from the total $6,000) is then the responsibility of Plan B, which can cover up to its limit.

Conclusion

The correct answer is option D, as it accurately reflects the limits of both insurance plans under the coordination of benefits provision. Plan A pays its maximum allowable amount first, and then Plan B covers the remaining eligible expenses, which culminates in a total coverage of $6,000. All other options either misstate the amounts or incorrectly describe the payment structure.