How much will an insured pay if their Major Medical plan has a $1,000 deductible and an 80/20 Coinsurance clause for $11,000 covered expenses?

To determine how much the insured will pay under a Major Medical plan with a $1,000 deductible and an 80/20 coinsurance clause for $11,000 in covered expenses, it is important to break down the calculation into steps.

First, the insured must meet their deductible, which is $1,000. This amount is the initial out-of-pocket cost that the insured pays before the insurance coverage begins to contribute. After the deductible is met, the remaining amount of covered expenses is calculated.

The total covered expenses are $11,000. After subtracting the $1,000 deductible, the remaining amount is $10,000. This is the amount that will be subject to the coinsurance clause.

With an 80/20 coinsurance arrangement, the insurance company pays 80% of the covered expenses, while the insured is responsible for the remaining 20%. Therefore, the insured will pay 20% of the $10,000 remaining expenses.

Calculating this, the insured's coinsurance responsibility equals 20% of $10,000, which is $2,000. Adding this amount to the initial $1,000 deductible, the total amount the insured will pay amounts to $3,000.

Thus,