Peter Has a Health Insurance Policy That Includes a Deductible

question 22

Multiple Choice

Peter has a health insurance policy that includes a deductible of $1,000, a coinsurance of 20%, and a stop-loss of $4,000. If his total bill is $20,000, how much will he pay?

• A) $1,000
• B) $3,800
• C) $4,000
• D) $4,800
• E) $19,000

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Definitions:

Step-Down Method

A method used in cost accounting that allocates support department costs to producing departments in a sequential process, where each department's costs are allocated to other departments based on a predetermined order.

Service Department Costs

Expenses related to departments that do not directly generate revenue but provide essential support services to those that do.

Operating Departments

Divisions within an organization that are directly responsible for producing goods or providing services.

Personnel Costs

The expenses directly related to the hiring, training, and payment of employees.