CH OO SIN G A H E ALTH IN SURAN CE P LAN. Tim and Lena Wallace have two children, a six-year-old and a five-month old. Their younger child, Justin, was born with a congenital heart defect that will require several major surgeries in the next few years to correct fully. Tim is employed as a salesperson for a major pharmaceutical firm, and Lena is not currently working outside of the home. Tim’s employer offers a choice between two health benefit plans: ● An indemnity plan that allows the Wallaces to choose health services from a wide range of doctors and hospitals. The plan pays 80 percent of all medical costs, and the Wallaces are responsible for the other 20 percent. There’s a deductible of $500 per person.

Tim’s employer will pay 100 percent of the cost of this plan for Tim, but the Wallaces will be responsible for paying $380 a month to cover Lena and the children under this plan.

● A group HMO. If the Wallaces choose this plan, the company still pays 100 percent of the plan’s cost for Tim, but insurance for Lena and the children will cost $295 a month.

They’ll also have to make a $20 co-payment for any doctor’s office visits and prescription drugs. They will be restricted to using the HMO’s doctors and hospital for medical services.

Which plan do you recommend the Wallaces choose? Why? What other health coverage options should they consider? L01