3.

Beckys comprehensive major medical health insurance plan at work has a deductible of $800. The policy pays 85 percent of any amount above the deductible. While on a hiking trip, Becky contracted a rare bacterial disease. Her medical costs for treatment, including medicines, tests, and a six-day hospital stay, totaled $8,993. A friend told her that she would have paid less if she had a policy with a stop-loss feature that capped her out-of-pocket expenses at $3,500.

a.	Calculate the total amount Becky would pay under the current policy. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Becky's co-insurance cost	$
Deductible	$
Total personal cost	$

$

6.

Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that contains information on the companys health insurance options. Aerosystems offers its employees the choice between a private insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on which health care program fits his needs. The following is an overview of that information.

a.	Blue Cross/Blue Shield plan: The monthly premium cost to Ronald will be $52.59. For all doctor office visits, prescriptions, and major medical charges, Ronald will be responsible for 20 percent and the insurance company will cover 80 percent of covered charges. The annual deductible is $720.
b.	The HMO is provided to employees free of charge. The copayment for doctors office visits and major medical charges is $10. Prescription copayments are $5. The HMO pays 100 percent after Ronalds copayment. No annual deductible.
c.	The POS requires that the employee pay $34.77 per month to supplement the cost of the program with the companys payment. If Ron uses health care providers within the plan, he pays the copayments as described above for the HMO. He can also choose to use a health care provider out of the network and pay 20 percent of all charges after he pays a $720 deductible. The POS will pay for 80 percent of those covered visits. No annual deductible.

Ronald decided to review his medical bills from the previous year to see what costs he had incurred and to help him evaluate his choices. He visited his general physician six times during the year at a cost of $120 for each visit. He also spent $75 and $99 on prescriptions during the year.

What annual medical costs will Ronald pay using the sample medical expenses provided if he were to enroll in the Blue Cross/Blue Shield plan? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Personal annual cost

$

7.

Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that contains information on the companys health insurance options. Aerosystems offers its employees the choice between a private insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on which health care program fits his needs. The following is an overview of that information.

a.	Blue Cross/Blue Shield plan: The monthly premium cost to Ronald will be $61.83. For all doctor office visits, prescriptions, and major medical charges, Ronald will be responsible for 25 percent and the insurance company will cover 75 percent of covered charges. The annual deductible is $850.
b.	The HMO is provided to employees free of charge. The copayment for doctors office visits and major medical charges is $10. Prescription copayments are $5. The HMO pays 100 percent after Ronalds copayment. No annual deductible.
c.	The POS requires that the employee pay $44.04 per month to supplement the cost of the program with the companys payment. If Ron uses health care providers within the plan, he pays the copayments as described above for the HMO. He can also choose to use a health care provider out of the network and pay 25 percent of all charges after he pays a $850 deductible. The POS will pay for 75 percent of those covered visits. No annual deductible.

Ronald decided to review his medical bills from the previous year to see what costs he had incurred and to help him evaluate his choices. He visited his general physician five times during the year at a cost of $170 for each visit. He also spent $84 and $108 on prescriptions during the year.

What total medical costs will Ronald pay if he enrolls in the HMO plan?

Personal annual cost

$

8.

Ronald Roth started his new job as controller with Aerosystems today. Carole, the employee benefits clerk, gave Ronald a packet that contains information on the companys health insurance options. Aerosystems offers its employees the choice between a private insurance company plan (Blue Cross/Blue Shield), an HMO, and a PPO. Ronald needs to review the packet and make a decision on which health care program fits his needs. The following is an overview of that information.

a.	Blue Cross/Blue Shield plan: The monthly premium cost to Ronald will be $51.57. For all doctor office visits, prescriptions, and major medical charges, Ronald will be responsible for 15 percent and the insurance company will cover 85 percent of covered charges. The annual deductible is $700.
b.	The HMO is provided to employees free of charge. The copayment for doctors office visits and major medical charges is $20. Prescription copayments are $10. The HMO pays 100 percent after Ronalds copayment. No annual deductible.
c.	The POS requires that the employee pay $33.75 per month to supplement the cost of the program with the companys payment. If Ron uses health care providers within the plan, he pays the copayments as described above for the HMO. He can also choose to use a health care provider out of the network and pay 15 percent of all charges after he pays a $700 deductible. The POS will pay for 85 percent of those covered visits. No annual deductible.

Ronald decided to review his medical bills from the previous year to see what costs he had incurred and to help him evaluate his choices. He visited his general physician five times during the year at a cost of $140 for each visit. He also spent $74 and $98 on prescriptions during the year. Assume Ron visited a physician outside of the network plan but had his prescriptions filled at a network-approved pharmacy.

If Ronald selects the POS plan, what would his annual medical costs be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Personal annual cost

$

9.

In 2005, Joelle spent $5,400 on her health care. If this amount increased by 5 percent per year, what would be the amount Joelle spent in 2015 for the same health care? Hint: Use Exhibit 1-A. (Round time value factor to 3 decimal places and final answer to the nearest whole dollar.)

Future annual cost

$

10.

As of 2012, per capita spending on health care in the United States was about $9,900. If this amount increased by 5 percent a year, what would be the amount of per capita spending for health care in 10 years? Hint: Use Exhibit 1-A. (Round time value factor to 3 decimal places and final answer to the nearest whole dollar.)

Future per capita spending

$