Choosing a health insurance plan.

Harriet and Jake Sanders have two children, a six-year-old and a five-month old. Their younger child, Alex, was born with a congenital heart defect that will require several major surgeries in the next few years to correct fully. Jake is employed as a salesperson for a major pharmaceutical firm, and Harriet is not currently working outside of the home. Jake’s employer offers a choice between two health benefit plans:

● An indemnity plan that allows the Sanders family to choose health services from a wide range of doctors and hospitals. The plan pays 80 percent of all medical costs, and the Sanders family is responsiblefor the other 20 percent. There’s a deductible of $500 per person. Jake’s employer will pay 100 percent of the cost of this plan for Jake, but the Sanderses will be responsible for paying $380 a month to cover Harriet and the children under this plan.

● A group HMO. If the Sanders family chooses this plan, the company still pays 100 percent of the plan’s cost for Jake, but insurance for Harriet and the children will cost $295 a month.

They’ll also have to make a $20 copayment 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 Sanders family choose? Why? What other health coverage options should they consider? P=78