1. Health Care Coverage Amounts. Michael Howitt of Berkley, Michigan, recently had his gallbladder removed. His total bill for this surgery, which was his only health care expense for the year, came to $13,890. His health insurance plan has a $500 annual deductible and an 80/20 coinsurance provision. The cap on Michael's coinsurance share is $2,000.

(a) How much of the bill will Michael pay?

Health care expense	13,890
Deductible	(-)500
Balance	(=)13,360
Coinsurance (20%) or cap ($2,000)
Total paid by Michael (deductible plus coinsurance or cap)

(b) How much of the bill will be paid by Michael's insurance?

Health care expense	13,890
Total paid by Michael	(-)
Total paid by insurance company	(=)