In an 80/20 coinsurance arrangement with no deductible, which party pays 80% of covered expenses?

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Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

Multiple Choice

In an 80/20 coinsurance arrangement with no deductible, which party pays 80% of covered expenses?

Explanation:
Coinsurance splits costs between the payer and the insured. In an 80/20 arrangement, the insurer pays 80% of covered expenses and the insured pays 20%. With no deductible, the 80/20 split applies from the first dollar of covered services, so the insurer covers 80% and the patient covers 20%. The plan administrator handles claim processing and plan administration, but the payments come from the insurer, not the administrator. Therefore, the party paying 80% is the insurer.

Coinsurance splits costs between the payer and the insured. In an 80/20 arrangement, the insurer pays 80% of covered expenses and the insured pays 20%. With no deductible, the 80/20 split applies from the first dollar of covered services, so the insurer covers 80% and the patient covers 20%. The plan administrator handles claim processing and plan administration, but the payments come from the insurer, not the administrator. Therefore, the party paying 80% is the insurer.

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