a) Suppose an insurance company charges Joe a monthly premium of $400 for a plan with a 20% coinsurance rate. The company has computed that Joe will use an average of 2 units of medical care per month at $150 each. What is this policy's loading fee?

b) Suppose a law is passed allowing individuals to pay their insurance premiums with before-tax dollars. Joe has a 15% marginal tax rate. How has the effective price of his policy changed?