Margo, age 35, was severely injured in an auto acci- dent. She is covered under her employer's preferred provider organization (PPO) plan. The plan provides major medical insurance with a $2 million lifetime limit, a calendar-year deductible of $300, a coinsur- ance requirement of 80-20 percent, and an annual stop-loss limit of $2,000. As a result of the accident, Margo incurred the following medical expenses: Cost of ambulance to the hospital Hospital bill for a three-day stay Surgery for a broken leg Prescription drugs outside the hospital Physical therapy for the broken leg $ 500 $15,300 $ 5,000 $ 300 $1,200 In addition, Margo could not work for one month and lost $3000 in earnings.

a. Based on the above, how much will Margo collect for her injury if she receives medical care from health care providers who are part of the PPO net- work?

b. Assume that Margo's broken leg does not heal properly, and she needs another surgical operation. Margo would like a different surgeon with an out- standing professional reputation to perform the operation. The surgeon is not a member of the PPO network. Will Margo's plan pay for the surgery? Explain your answer.