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The Ionic Group, a provider group with 10,000 plan members, purchased for its hospital risk pool aggregate stop-loss insurance with a threshold of 110% of projected costs and a 10% coinsurance provision. Ionic funds the hospital risk pool at $40 per member per month (PMPM).
If Ionic's actual hospital costs are $5,580,000 for the year, then, under the aggregate stop-loss agreement, the stop-loss insurer is responsible for reimbursing Ionic in the amount of
Suggested Answer: B
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5 comments · newest first
NO
Norah
3 days ago
Ionic has 10,000 members and funds at $40 PMPM.
YE
Yen
8 days ago
If I recall correctly, the insurer covers costs above the threshold, so we should calculate the excess over $5,040,000 and then apply the 10% coinsurance.
BE
Bev
14 days ago
I think we also need to subtract the coinsurance amount from the total costs to find out how much the insurer pays. I practiced a similar question where we had to do that.
OR
Oretha
19 days ago
I’m a bit unsure about the coinsurance part. Does that mean the insurer only covers a percentage after we hit the threshold?
FA
Fausto
24 days ago
I remember we calculated the threshold by multiplying the PMPM by the number of members and then by 12 months. I think that’s around $5,040,000 for Ionic.