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#1
03-15-2019, 05:18 PM
 fifapro Member SOA Join Date: Nov 2014 College: College Graduate Posts: 74
MATE Practice Questions #34

Hi Everyone,

I was hoping someone has a deeper answer breakdown of this question for part A. Having a hard time working with the family deductible and coordination of benefits.

Dustin - maybe you can break it down a little deeper for me? How is the family deductible already met when Rebeccas first claim comes around? I get that her plan covered part of johns claim and then hers but there is no like math showing its reached.
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#2
03-15-2019, 08:52 PM
 Actuarialsuck Member Join Date: Sep 2007 Posts: 6,148

Is this a question you can post?
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Quote:
 Originally Posted by Buru Buru i'm not. i do not troll.
#3
03-16-2019, 12:28 AM
 MATEseminars.dc Member SOA Join Date: Aug 2018 College: Northern Arizona University Posts: 35
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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#4
03-18-2019, 01:49 PM
 fifapro Member SOA Join Date: Nov 2014 College: College Graduate Posts: 74

Quote:
 Originally Posted by MATEseminars.dc 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.
Thank you Dustin. I got confused with all the keeping track of deductibles.
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#5
03-22-2019, 02:51 PM
 Anonymous User Member SOA Join Date: Feb 2017 Posts: 32

Im using MATE and I am also having a hard time following #34 Part (c). Why is 2nd payer's liability of \$500 from Rebecca's claim of \$1,500 still unable to satisfy the \$1,000 family deductible of John's? He has already made a \$3,000 claim earlier henceforth the family deductible should have already been satisfied then.
#6
04-05-2019, 09:08 PM
 MATEseminars.dc Member SOA Join Date: Aug 2018 College: Northern Arizona University Posts: 35
What counts toward paying down the deductible

Quote:
 Originally Posted by Anonymous User Im using MATE and I am also having a hard time following #34 Part (c). Why is 2nd payer's liability of \$500 from Rebecca's claim of \$1,500 still unable to satisfy the \$1,000 family deductible of John's? He has already made a \$3,000 claim earlier henceforth the family deductible should have already been satisfied then.
Short answer: only part of that out-of-pocket that "John pays" is paying down the deductible. The other part is in the coinsurance phase and thus is not counted toward the family deductible. Only individual payments that actually pay down deductible count towards the family deductible.

I will just explain Plan 1 and the rest will follow the same logic.

For Johns first claim of 3,000: 1st payer would pay 2,000 : (3,000 - 500) * 80% = 2,000. On a stand alone basis that would have left John with the remaining 1,000 and that would have been split 500 toward his deductible and then the other 500 would have been paid from coinsurance.

At this point in Johns plan, Johns deductible has been meet but the family deductible still has 500 until it is meet: 1,000 - 500 = 500. It takes Rebecca's claim to pay that extra 500 toward her deductible and at time both Rebecca's and the families deductibles are meet.

I hope that helps.
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