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Old 03-16-2019, 12:28 AM
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Default MATE Practice Questions #34

This is question #8c-e of the Fall 2016 exam for others who want to follow along. (Be sure to change Owens May 30th claim line to $124 in cost share instead of $120 ... that was an adjustment to allow part b to have an possible solution).

First off this question uses a COB equivalent to the exclusion method so if you are familiar with that it should help. The second thing is that you need to make sure you understand how a family deductible works (on a non HSA type plan, HSA type plans use an aggregate deductible). Its called an embedded deductible and the basics are that each person has their own individual deductible to meet, but theirs payments will also count towards the family. They can either hit their own deductible or if the family deductible is meet all individual deductibles are considered meet. The individual deductibles are embedded with in the family. If you need more on that you can look on line there are some good websites that have explanations.

Now on to the problem: this will be a longer post as to give the detail you are asking

Part A:
Claim 1:
John has a claim for 300 and that is under his 500 ded so he would pay the full 300. But since there is a 2nd payer, that amount (300) is now subject to the 2nd plans benefits. For the 2nd plan the claim meets the individual ded of 250, and goes into coinsurance phase. The plan would pay the coinsurance amount: (300-250)*.8 = 40

Thus the member would pay the difference between what was due after the 1st payer applied benefits less what the secondary plan would pay: 300 - 40 = 260

Note that we still do not know for sure what plan John is on.

Claim 2:
Rebecca has a claim of 400. Her plan will be primary so we calculate those benefits first. She will pay all of the 250 individual ded and then 20% coinsurance on the remaining, 250 + (400-250)*.2 = 280. At this point Rebecca has meet her individual ded and, because of John's 300 claim, the family ded has been meet too. Now the 280 would move to the 2nd payer and the entire amount would go towards paying down Rebecca's individual ded and thus she would still be left with paying the 280.

This implies the amount that Rebecca would pay for the 400 claims would be 280.

Claim 3 for Owen: either Johns or Rebecca's plan is going to pay first ... so pick one and check.

If you assume Rebecca's plan pays 1st:
Owens claim of 500 goes straight to coinsurance since the family ded has been meet. Thus 500 * .2 = 100 is the amount remaining after the primary's benefits have been applied. Then the 100 would go to the 2nd plan. At this point the family deductible under Johns plan, the 2nd plan in this case, would still not be meet. There would be 300 + 280 and now add on this 100 = 680 which is less than the 1,000 family ded in Johns plan. This would leave the members paid portion to be 100.

You can now see that Rebecca's plan is primary for Owen since it matches the 100 member paid amount given in the problem. You should also check the situation where we assume John's plan to be primary to convince your self that you can not get to 100 member cost share that way.

I hope that is enough commentary to get you started on the problem and hopefully now you can follow the MATE solution a little easier.
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Dustin Conrad
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