{"id":1728,"date":"2016-05-30T21:28:55","date_gmt":"2016-05-31T01:28:55","guid":{"rendered":"http:\/\/scripts.mit.edu\/~zong\/wpress\/?p=1728"},"modified":"2016-06-03T01:49:50","modified_gmt":"2016-06-03T05:49:50","slug":"optimizing-insurance-ordering","status":"publish","type":"post","link":"https:\/\/blog.yhuang.org\/?p=1728","title":{"rendered":"optimizing insurance ordering"},"content":{"rendered":"<p>Sometimes the order in which procedures are performed has an effect on the payout from insurance. This is the case when there is both a deductible and a coinsurance.<\/p>\n<p>Suppose the deductible is \\(d\\), and the price and coinsurance of the \\(i\\)-th procedure performed are \\(p_i\\) and \\(c_i\\) respectively, then the total out-of-pocket cost is:<\/p>\n\\(d + (p_1 &#8211; d) c_1 + p_2 c_2 + \\cdots = (1-c_1) d + \\sum_i p_i c_i\\)\n<p>The second term is fixed cost; it&#8217;s the coinsurance on the first procedure that matters. This shows that to minimize out-of-pocket cost, one should, somewhat surprisingly, get the procedure with the <strong>highest<\/strong> coinsurance first. Essentially, every dollar of the deductible paid is subsidizing what the insurance company might have paid, but for a procedure with very high coinsurance, the subsidy is not very much to begin with.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sometimes the order in which procedures are performed has an effect on the payout from insurance. This is the case when there is both a deductible and a coinsurance. Suppose the deductible is , and the price and coinsurance of the -th procedure performed are and respectively, then the total out-of-pocket cost is: The second [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3201,3200,3198,3197,3202,3199],"class_list":["post-1728","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-claims","tag-coinsurance","tag-deductible","tag-insurance","tag-medical-procedure","tag-reimbursement"],"_links":{"self":[{"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=\/wp\/v2\/posts\/1728","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1728"}],"version-history":[{"count":3,"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=\/wp\/v2\/posts\/1728\/revisions"}],"predecessor-version":[{"id":1731,"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=\/wp\/v2\/posts\/1728\/revisions\/1731"}],"wp:attachment":[{"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.yhuang.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}