Mark, age 25, is insured under an individual major medical policy with a lifetime limit of $2 million. The plan has a calendar-year deductible of $500, 80-20 percent coinsurance, and an annual stop-loss limit of $2000. Mark recently had outpatient arthroscopic sur- gery on his knee, which he injured in a skiing accident. The surgery was performed in an outpatient surgical center. Mark incurred the following medical expenses. Outpatient X-rays and diagnostic tests $700 Covered charges in the surgical center 9,800 Surgeon's fee 3,000 Outpatient prescription drugs 300 Physical therapy expenses 700 In addition, Mark could not work for two weeks and lost $2000 in earnings.

a. Based on the above information, how much of the loss will be paid by the insurance company?

b. If Mark's policy did not contain a stop-loss limit, how much will the insurance company pay? Show your calculations.