Question

Linda Frankell pays $50.00 a month for group health insurance. There is a $300 deductible. Her medical bills for the last year were $2,600.00. Linda's insurance company provided payment of 80% of the bills less the deductible.
What was the insurance company's payment? $

What was Linda's total cost (including the monthly premium)? $

Answer 1

Linda Frankell Pays $50.00 a month towards group health insurance, so for a year, that is for 12 months, her premiums would be

Linda's premiums for 12 months = $50 × 12 = $600

Deductible is the amount Linda Frankell will have to pay each year as a policy holder towards her medical expenses before the insurance company pays its share.

Amount Linda pays towards deductible = $300

Linda's medical bills = $2,600.00
The insurance company will pay 80% of the bills less the deductible, which means, the insurance company will pay 80% of the ($2,600.00 - $300 deductible = $2,300.00)

∴ Amount the insurance company pays = 80% of $2,300.00 = $1,840.00

Amount Linda has to pay towards the $2,300.00 = $2,300.00 - $1,840.00 = $460.00

Linda's total cost = Linda's 12 months premiums + $300 deductible + $460 = $600 + $300 + $460 = $1,360.00

Insurance company's payment = $1840.00
Linda's total cost = $1,360.00