Answered step by step
Verified Expert Solution
Question
1 Approved Answer
2 . Benefit of health insurance - A cautionary tale In 2 0 1 6 , Sam became responsible for providing his own health insurance.
Benefit of health insurance A cautionary tale
In Sam became responsible for providing his own health insurance. He obtained suitable coverage and paid annual premiums as shown in the following table. Compute Sams total premiums:
Sams Premiums
$
Total
$
Except for an occasional minor illness requiring a doctors attention, a drug prescription, and periodic, routine tests, Sam enjoyed good health during those years. Because he had no reason to think that would change, by the end of Sam was considering dropping his health insurance coverage. After all, he could think of a lot of other uses for the thousands of dollars he spent each year on increasing premiums. Sam decided to pay premiums for another year but planned to take another look at his health care plan at the end of
It Could Happen to You, It Could Happen to Me
In December Sam accepted an invitation from friends to go snowboarding. Sam did everything right: took a lesson, stayed on trails well within his skill level, and maintained an awareness of people and objects near him. Even though he thought it was a bit dorky to wear wrist guards and a helmet, his friends insisted that he take standard and reasonable safety measures.
Sam was enjoying the day when, from out of nowhere actually the woods came an out of control skier who ran into Sam. Sam was injured and taken to the nearest hospital by ambulance.
Sams injuries included a broken wrist and elbow as well as cuts and bruises. Of biggest concern was the uncertainty of his head injury. Sam spent a couple of days in intensive care. Fortunately, he didnt have a broken skull, but did have a concussion. Surgery was performed to repair the broken wrist and elbow. Since Sam was in good health, his recovery was complete. Sam returned to full function in about six months.
Soon after Sam returned home, however, the medical bills for the ambulance, emergency room, intensive care, medications, doctors, tests, and other services arrived. Sam also had to have physical therapy for his wrist and elbow. His total medical expenses were $ It was time to find out if all those premiums paid since would pay off for just one, albeit dramatic, incident.
Overall, Sams insurance paid of the total medical expenses, thus making him responsible for
of the expenses, or
$
Sams insurance paid
$
His outofpocket expenses for the accident of
$
plus the insurance premiums of
$
totaled
$
If Sam had canceled his health insurance at the end of his outofpocket expenses for the accident would have been
$
In this case, did Sam benefit from having health insurance? Neither, he broke even
What are reasonable morals of the story? Check all that apply.
Dont get sick.
Think long and hard about the best tradeoff of coverage and cost in a health care plan.
Avoid engaging in physical activity.
Never leave the house.
It can be financially risky to go without health insurance.
Some employers pay part or all of the health insurance premiums for employees who are enrolled in one of the companys sponsored plans. Assume that during the same time period that Sam paid for his premiums in full that he had, instead, worked for a firm that paid of his premiums for the same coverage. Instead of paying premiums of
$
over the years, Sam would have paid
$
and saved
$
In this case, Sams outofpocket expenses specific to his snowboarding accident would have been they actually were because
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started