Comparing Health Insurance Plans Your employer offers two health plan choices and requires that employees pay part of the premium cost.

The fee-for-service option will cost you \($100\) per month for single coverage, does not cover preventive care, and imposes a $300-per-person annual deductible and 20 percent coinsurance to a stop-loss limit of \($2,000\). The fee-for-service plan also covers prescription drugs after a copay of \($30\) per prescription. The managed care option (an HMO) will cost you \($200\) per month, covers all medical services (including preventive care and prescription drugs) but requires a \($10\) copay for each office visit or prescription. For each of the following scenarios, which cover one year, calculate how much your out-of-pocket expense would be under each plan:

a. You have an annual physical ($200), visit the doctor twice for illness (\($50\) per visit), and incur prescription drug costs of \($500\) (10 prescriptions at \($50\) each).

b. You have an annual physical, have surgery for a skiing injury (\($3,000\) covered charges), and incur prescription drug costs of \($200\) (4 prescriptions at \($50\) each).