Margo, age 35, was severely injured in an auto accident. She is covered under he
ID: 455936 • Letter: M
Question
Margo, age 35, was severely injured in an auto accident. She is covered under her employer's preferred provider organization (PPO) plan. The plan has a $1000 calendar-year deductible, a 80/20 coinsurance, and an annual out-of-pocket limit of $3,000. As aresult of the accident, Margo incurred the following medical expenses: Cost of ambulance to the hospital $500 Hospital bill for a three-day stay $24,000 Surgery for a broken leg $ 5,000 Prescription drugs outside the hospital $300 Physical therapy for the broken leg $1200 In addition, Margo could not work for one month and lost $4000 in earnings. a. Based on the above, how much will Margo collect for her injury if she receives medical care from health care providers who are part of the PPO network? (Assume that all charges shown are the allowable or approved charges by the insurer and all providers are in the PPO network.) b. Assume that Margo's broken leg does not heal properly, and she needs another surgical operation. Margo would like a different surgeon with an outstanding professional reputation to perform the operation. The surgeon is not a member of the PPO network. Will Margo's plan pay for the surgery? Explain your answer.
Explanation / Answer
a) Deductible = $ 1000
Co-insurance = 80/20
Out-of-pocket limit = $3000
Total Medical Expenses = $31000
Remaining bill after Margo pay deducitable = $ 31000- $ 1000
= $30000
Co-insurance amount paid by Margo = $6000
Remaining Bill = $ 24000
But the insurance has annual out -of -pocket limit and Margo has already paid $ 1000 so remaining $ 28000 will be paid by insurance company.
Thus, margo will collect $ 28000 from insurance company.
b) No, Margo's plan wouldn't pay for the surgery as she has already avail the annual benefit of insurance and secondly, the surgeon doesn't belong to PPO network.