Jasper Bell was a self-employed window washer earning approximately $700 per week. One day, while cleaning windows on the eighth floor of the Third National Bank Building, he tripped and fell from the scaffolding to the pavement below. He sustained severe multiple injuries but miraculously survived the accident. He was immediately rushed to the local hospital for surgery. He remained there for 60 days of treatment, after which he was allowed to go home for further recuperation. During his hospital stay, he incurred the following expenses: surgeon, $7,500; physician, $2,000; hospital bill for room and board, $250 per day; nursing services, $1,200; anesthetics, $600; wheelchair rental, $100; ambulance, $150; and drugs, $350. Jasper has a major medical policy that has a $3,000 deductible clause, an 80 percent co-insurance clause, internal limits of $180 per day on hospital room and board, and $1,500 as a maximum surgical fee. The policy provides no disability income benefits.

1. Explain the policy provisions as they relate to deductibles, co-insurance, and internal limits. $3,000 deductible: He must incur $3,000 in costs before the policy will pay anything, 80% co-insurance: After the deductible is met, the policy will pay 80% of the costs. He is responsible for the other 20% until he the stop-loss amount is reached.

2. How much should Jasper recover from the insurance company? How much must he pay out of his own pocket?

3. Would any other policies have offered Jasper additional protection? What about his inability to work while recovering from his injury?

4. Based on the information presented, how would you assess Jasper’s health care insurance coverage? Explain.