Paul Smith pays $50.00 a month for group health insurance. There is a $300 deductible. His medical bills for the last year were
$2,600.00. Paul’s insurance company provided payment of 80% of the bills less the deductible. What was Paul’s total cost (including the monthly premium)?
Take the monthly payment of $50 and multiply it by 12 because there is 12 months in a year which is $600. Next subtract $2,600 by your deduction of $300 which is $2,300. Then multiply by 20% because the insurance pays 80% leaving you with 20%, you get $460. Add $460 and $300 because those are the amounts you paid and you get $760. Now add the $600 to the $760 because of the monthly payment. The total comes out to $1,360.
