Co-insurance & Deductible Math for Medical Plans
Matt had a doctor bill of 1000. He had a deductible of $500 and 80/20 co insurance.
First step, remember what is what, that Matt has to pay the deductible first and then co-insurance kicks in. The first #, 80, is saying that the insurance company will pay 80% of the bill after the deductible is paid, The second #, 20, is saying that Matt will pay 20% of the bill after he has paid the deductible.
And they will ask you different things like:
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- How much will Matt pay in total? (you would take the bill, 1000 minus his 500 deductible, you will get 500, then you need to get 20% of that, because that’s his share of the co-insurance. In the calculator you would type 500X 0.2= and it will be 100. So, Matt has paid a $500 deductible and a $100 co-insurance for a total of $600.)
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- What will Matt pay for his share of Co-insurance? (here, you would do the same as before, subtract the deductible from the total, which gets you 500 and multiply that by 20% because that’s his share of Co- insurance, 500 x 0.2 = 100 and stop there because that’s all they are looking for.)
- What will the insurance company pay? (here, we begin the same, bill minus the deductible, 1000 – 500 = 500. Now we multiply that by 0.8 because 80% is the insurance companies share, so 500 x 0.8 = 400.)
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