C Was Injured While Deep Sea Diving: Learn How Much It Costs!

Question

C was injured while deep sea diving and requires a hospital stay. C has a major medical policy with a 80/20 coinsurance class and a $400 deductible. What is the maximum C will pay if the covered medical expenses are $2,000?

Answer

When C was injured while deep sea diving, the resulting medical expenses can be a concern. To understand the financial impact and the maximum amount C will pay under their major medical policy, let’s break down the details. C’s policy includes an 80/20 coinsurance clause and a $400 deductible. Let’s explore this step by step to determine C’s out-of-pocket costs.

Step-by-Step Calculation

1. Deductible Payment: When C was injured while deep sea diving, the first expense to consider is the deductible. A deductible is the amount C must pay out-of-pocket before the insurance coverage begins. In this case, the deductible is $400.
2. Remaining Medical Expenses After Deductible: After paying the deductible, the next step is to calculate the remaining medical expenses. If the total covered medical expenses amount to $2,000, we subtract the $400 deductible:

$2,000−$400=$1,600

Thus, $1,600 remains after the deductible is paid.

3. Applying Coinsurance to Remaining Expenses: The coinsurance clause specifies that C is responsible for 20% of the remaining expenses, and the insurance covers the other 80%. Therefore, we calculate C’s share of the $1,600:

20% of $1,600=0.20×$1,600=$320

The insurance company will cover 80% of the remaining expenses:

80% of $1,600=0.80×$1,600=$1,280

4. Total Out-of-Pocket Cost for C: Finally, to find the total amount C will pay, we add the deductible to C’s coinsurance responsibility:

$400 (deductible)+$320 (coinsurance)=$720

Summary

When C was injured while deep sea diving, the maximum amount C will pay out-of-pocket for covered medical expenses of $2,000 is $720. This total includes the $400 deductible and the $320 coinsurance amount. Understanding these costs helps C better prepare for the financial implications of such an injury and ensures they can manage their recovery without undue stress about medical bills.